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 38 desk units (sales price of $1,170) and 12 chairs (sales price of $420).

BUSINESS SOLUTIONSComputer Furniture Segment
Segment Income Statement*
For Quarter Ended March 31, 2020
Sales	$	148,500
Cost of goods sold		110,100
Gross profit		38,400
Expenses
Sales commissions (10%)		14,850
Advertising expenses		6,600
Other fixed expenses		15,600
Total expenses		37,050
Net income	$	1,350

* Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (114 desks $1,170) + (36 chairs $420) = $133,380 + $15,120 = $148,500 Cost of goods sold: (114 desks $670) + (36 chairs $170) + $27,600 = $110,100 Santana Rey believes that sales will increase each month for the next three months (April, 46 desks, 24 chairs; May, 50 desks, 27 chairs; June, 54 desks, 30 chairs) if selling prices are reduced to $1,040 for desks and $370 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 $670 for desks and $170 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,200 and other fixed expenses will remain at $5,200 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. 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.