Santana Rey expects second-quarter 2020 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 45 desk units (sales price of $1,340) and 29 chairs (sales price of $590). BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2020 Sales $ 232, 230 Cost of goods sold 175, 680 Gross profit 56,550 Expenses Sales commissions (10%) 23, 223 Advertising expenses 11,700 Other fixed expenses 20,700 Total expenses 55,623 Net income $ 927 * Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (135 desks * $1,340) + (87 chairs * $590) = $180,900 + $51,330 = $232,230 # Cost of goods sold: (135 desks * $840) + (87 chairs * $340) + $32,700 = $175,680 Santana Rey believes that sales will increase each month for the next three months (April, 53 desks, 41 chairs; May, 57 desks, 44 chairs; June, 61 desks, 47 chairs) if selling prices are reduced to $1,250 for desks and $540 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 $840 for desks and $340 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,900 and other fixed expenses will remain at $6,900 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. 2. Recommend whether Santana should implement the proposed changes. Hint: Compare quarterly income for the proposed April- May-June period to the quarterly income for the January-February-March period. Required 1 Required 2 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. (Negative balances and should be indicated with minus sign.) BUSINESS SOLUTIONSCOMPUTER FURNITURE SEGMENT Budgeted Income Statements For Months of April, May, and June April May June 0 0 0 Expenses Sales commissions 0 0 Advertising Other fixed expenses 0 0 0 0 0 Total expenses Net income (loss)