Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
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 42 desk units (sales price of $1.270) and 22 chairs (sales price of $520) BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2018 Sales $194,340 Cost of goods solat 145,440 Gross profit 48,900 Expenses Sales commissions (10%) 19,434 Advertising expenses 9,000 Other fixed expenses 18.600 Total expenses 47,634 Net income $ 1,266 Reflects revenue and expense activity only related to the computer furniture segment + Revenue: (126 desks * $1.270) + (66 chairs * $520) $160,020 - $34,320 - $194,3ho Cost of goods sold: (126 desks * $770) + (66 chairs $270) + $30,600 = $145,440 Santana Rey believes that sales will increase each month for the next three months (Apell, 50 desks, 34 chairs: May, 54 desks, 37 chairs: June 58 desks, 40 chairs) if selling prices are reduced to $1170 for desks and $470 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 $770 for desks and $270 for choirs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,200 and other fixed expenses will remain at $6,200 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sound Investing, Chapter 6 - Valuation Of Assets And Liabilities

Authors: Kate Mooney

1st Edition

0071719288, 9780071719285

More Books

Students also viewed these Accounting questions