Santana Rey expects second-quarter 2020 sales of Business Solutionss line of computer furniture to be the same as the first quarters sales (reported below) without any changes in strategy. Monthly sales averaged 42 desk units (sales price of $1,280) and 23 chairs (sales price of $530).

BUSINESS SOLUTIONSComputer Furniture Segment
Segment Income Statement*
For Quarter Ended March 31, 2020
Sales	$	197,850
Cost of goods sold		148,500
Gross profit		49,350
Expenses
Sales commissions (10%)		19,785
Advertising expenses		9,900
Other fixed expenses		18,900
Total expenses		48,585
Net income	$	765

* Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (126 desks $1,280) + (69 chairs $530) = $161,280 + $36,570 = $197,850 Cost of goods sold: (126 desks $780) + (69 chairs $280) + $30,900 = $148,500 Santana Rey believes that sales will increase each month for the next three months (April, 50 desks, 35 chairs; May, 54 desks, 38 chairs; June, 58 desks, 41 chairs) if selling prices are reduced to $1,180 for desks and $480 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 $780 for desks and $280 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,300 and other fixed expenses will remain at $6,300 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.