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Santana Rey expects second - quarter 2 0 2 0 sales of Business Solutions's line of computer furniture to be the same as the first
Santana Rey expects secondquarter sales of Business Solutions's line of computer furniture to be the same as the first quarter's sales reported below without any changes in strategy. Monthly sales averaged desk units sales price of $ and chairs sales price of $
tabletableBUSINESS SOLUTIONSComputer FurnitureSegment Income StatementFor Quarter Ended March Sales $
Santana Rey expects secondquarter sales of Business Solutions's line of computer furniture to be the same as the first quarter's sales reported below without any changes in strategy. Monthly sales averaged desk units sales price of $ and chairs sales price of $
Reflects revenue and expense activity only related to the computer furniture segment.
Revenue: desks $ chairs $
Cost of goods sold: desks $ chairs $
Santana Rey believes that sales will increase each month for the next three months April desks, chairs; May, desks, chairs; June, desks, chairs if selling prices are reduced to $ for desks and $ for chairs and advertising expenses are increased by and remain at that level for all three months. The products' variable cost will remain at $ for desks and $ for chairs. The sales staff will continue to earn a commission, the fixed manufacturing costs per month will remain at $ and other fixed expenses will remain at $ per month.
Required:
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 threecolumn format, with one column for each month. Recommend whether Santana should implement the proposed changes. Hint Compare quarterly income for the proposed AprilMayJune period to the quarterly income for the JanuaryFebruaryMarch period.
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Recommend whether Santana should implement the proposed changes. Hint Compare quarterly income for the proposed AprilMayJune period to the quarterly income for the JanuaryFebruaryMarch period.
Complete this question by entering your answers in the tabs below.
Required
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 threecolumn format, with one column for each month. Negative balances and should be indicated with minus sign.
tableBUSINESS SOLUTIONSCOMPUTER FURNITURE SEGMENTBudgeted Income StatementsFor Months of April, May, and JuneApril,May,,JuneSales$Cost of goods soldGross profit,,ExpensesSales commissionsAdvertisingLOther fixed expenses,ETotal expenses,,Net income loss
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