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 38 desk units (sales price of $1,190) and 14 chairs (sales price of $440). BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement* For Quarter Ended March 31, 2020 Sales $154,140 Cost of goods sold 114,840 Gross profit 39,300 Expenses Sales commissions (10%) 15,414 Advertising expenses 7,200 Other fixed expenses 16,200 Total expenses 38,814 Net income $ 486 * Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (114 desks * $1,190) + (42 chairs * $440) = $135,660 + $18,480 = $154,140 # Cost of goods sold: (114 desks * $690) + (42 chairs * $190) + $28,200 = $114,840 Santana Rey believes that sales will increase each month for the next three months (April, 46 desks, 26 chairs; May, 50 desks, 29 chairs; June, 54 desks, 32 chairs) if selling prices are reduced to $1,070 for desks and $390 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 $690 for desks and $190 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,400 and other fixed expenses will remain at $5,400 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 Rey should implement the proposed changes. 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 SOLUTIONS-COMPUTER FURNITURE SEGMENT Budgeted Income Statements For Months of April, May, and June April May June 0 0 0 Expenses Sales commissions Advertising Other fixed expenses Total expenses Net income (loss) 0 0 0 Required 1 Required 2 Recommend whether Santana Rey should implement the proposed changes. Recommend whether Santana Rey should implement the proposed changes.