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Sales BUSTNESS SOLUTIONS Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2018 $216,600 Cost of goods sold' 141,700 Gross profit 74,900 Expenses

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Sales BUSTNESS SOLUTIONS Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2018 $216,600 Cost of goods sold' 141,700 Gross profit 74,900 Expenses Sales commissions (10%) 21,660 Advertising expenses 10.800 Other fixed expenses 19,800 Total expenses 52,260 Net income $ 22,640 * Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (132 desks * $1,310) + 78 chairs $560) = $172,920+ $43,680 = $216,600 1 Cost of goods sold: (132 desks * $810) + (78 chairs * $310) + $31,800 - $141,700 Santana Rey believes that sales will increase each month for the next three months (April, 52 desks, 38 chairs: May, 56 desks, 41 chairs; June, 60 desks, 44 chairs) if selling prices are reduced to $1,210 for desks and $510 for chairs, and advertising expenses are increased by 10% and remain at that level for all three months. The products' variable cost will remain at $810 for desks and $310 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,600 and other fiveri aynences will remain at $6.600 ner month Prey 1 of 1 !!! Next > Report (3) (1).docx - DO Report (3).docx e a 0 0 9 other foxed expenses will remain at $6,600 per month Required 1. Prepare budgeted income statements for the computer furniture segment for each of the months of April, May, and June that show the expected results from implementing the proposed changes. Use a three column format, with one column for each month BUSINESS SOLUTIONS COMPUTER FURNITURE SEGMENT Budgeted Income Statements For Months of April, May, and June April May Expenses Sales commissions Advertising Other fed expenses Total expenses Netcomes) 2. Recommend whether Santana Rey should implement the proposed changes Should implement the proposed changes Should not implement the proposed changes

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