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Requirements 1. Prepare budgeted income statements for both options, assuming both options begin in January and January sales remain $20,000. Round all calculations to the
Requirements 1. Prepare budgeted income statements for both options, assuming both options begin in January and January sales remain $20,000. Round all calculations to the nearest dollar. 2. Which option should Holly choose? Explain your reasoning. More info Option 1 is to increase advertising by $1,500 per month. Option 2 is to use better-quality materials in the manufacturing process. The better materials will increase the cost of goods sold to 65% but will provide a better product at the same sales price. The marketing manager projects either option will result in sales increases of 10% per month rather than 5%. Data table S and A Expenses ($3,000+10% of sales) Operating Income Income Tax Expense ( 20% of operating income) Net Income Requirement 1. Prepare budgeted income statements for both options, assuming both options begin in January and January sales remain $20,000. Round all calculations to the nearest dollar. Begin by preparing the budgeted income statement for Option 1. Now prepare the budgeted income statement for Option 2. (Round all amounts to the nearest whole number.) Requirement 2. Which option should Holly choose? Explain your reasoning. If one of the two options is chosen, it would be because net income for the quarter is expected to be higher under this option. However, because both options are expected to yield net income for the quarter than the $7,932 currently budgeted, Holly may decide
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