Santana Rey expects second-quarter 2018 sales of her new line of computer furniture to be the same as the first quarter's sales (reported below) without any changes in strategy. Monthly sales averaged 44 desk units (sales price of $1,320) and 27 chairs (sales price of $570 BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement* For Quarter Ended March 31, 2018 $220,410 144,860 75,550 Sales Cost of goods sold Gross profit Expenses Sales commissions (10%) Advertising expenses Other fixed expenses 22,041 11,100 20,100 53,241 $ 22,309 Total expenses Net income Reflects revenue and expense activity only related to the computer furniture segment. t Revenue: (132 deskS x $1,320) + (81 Chairs $570)-$174,240 + $46,170-$220,410 t Cost of goods sold: (132 desks x $820) (81 chairs x $320) + $32,100 $144,860 Santana Rey believes that sales will increase each month for the next three months (April, 52 desks, 39 chairs; May, 56 desks, 42 chairs; June, 60 desks, 45 chairs) if selling prices are reduced to $1,230 for desks and $520 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 $820 for desks and $320 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,700 and other fixed expenses will remain at $6,700 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 June Sales Cost of goods sold Gross profit Expenses Sales commissions Advertising Other fixed expenses Total expenses Net income (loss) 2. Recommend whether Santana Rey should implement the proposed changes. Should implement the proposed changes Should not implement the proposed changes