Problem 20-3A (Algo) Manufacturing: Preparation and analysis of budgeted income statements LO P3 Merline Manufacturing makes its product for $50 per unit and sells it for $140 per unit. The sales staff receives a commission of 10% of sales. Its December income statement follows MERLINE MANUFACTURING Income Statement For Month Ended December 31 Sales $ 1,400,000 Cost of goods sold 500,000 Gross profit 900,000 Selling, general, and administrativo expetuses Sales commissions (1096) 5140,000 Advertising 220,000 Omice rent 25.000 Administrative salaries 45,000 Depreciation Office equipment 35.000 Office Tosutice 13.000 498.000 Net income S 402.000 Management expects December's results to be repeated in January, February, and March without any changes in strategy Management, however, has an alternative plan. It believes that if the unit selling price is reduced to $125 per unit and advertising is increased to $275,000 per month, sales units will be 11000 for January, 12 100 for February, and 13,310 for March The cost of its product will remain at $50 per unit, the sales staff will continue to earn a 10% commission and the remaining expenses will stay the same Required: 1. Prepare budgeted income statements for each of the months of January February, and March that show results from Implementing the proposed plan. 2. For the proposed plan is income in March budgeted to be higher than income in December? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare budgeted income statements for each of the months of January February, and March that show results from Implementing the proposed plan. (Enter your final answers in whole dollars) MERLINE MANUFACTURING Budgeted Sales January February March Budgeted sales in dollars) MERLINE MANUFACTURING Budgeted Income Statement January February March