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 40 desk units (sales price of $1,220) and 17 chairs (sales price of $470). BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2018 Sales" $170, 370 Cost of goods sold 107,320 Gross profit 63,050 Expenses Sales commissions (10%) 17,037 Advertising expenses 8,100 Other fixed expenses 17,100 Total expenses 42,237 Net income $ 20,813 * Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (120 desks * $1,220) + (51 chairs $470) = $146,400 + $23,970 = $170,370 # Cost of goods sold: (120 desks * $720) + (51 chairs * $220) + $29,100 = $107,320 Santana Rey believes that sales will increase each month for the next three months (April, 48 desks, 29 chairs; May, 52 desks, 32 chairs; June, 56 desks, 35 chairs) if selling prices are reduced to $1,100 for desks and $420 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 $720 for desks and $220 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,700 and other fixed expenses will remain at $5,700 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 Expenses Sales commissions Advertising Other fixed expenses Total expenses Net income (loss) 2. Recommend whether Santana Rey should implement the proposed changes. Should not implement the proposed changes Should implement the proposed changes