Segment Segment Income Statement* For Quarter Ended March 31, 2020 Sales $ 212,850 Cost of goods solat 159,600 Gross profit 53, 250 Expenses Sales commissions (10%) 21,285 Advertising expenses 10,500 Other fixed expenses 19,500 Total expenses 51,285 Net income $ 1,965 * Reflects revenue and expense activity only related to the computer furniture segment. t Revenue: (132 desks * $1,300) + (75 chairs * $550) = $171,600 + $41,250 = $212,850 # Cost of goods sold: (132 desks * $800) + (75 chairs * $300) + $31,500 = $159,600 Santana Rey believes that sales will increase each month for the next three months (April, 52 desks, 37 chairs; May, 56 desks, 40 chairs; June, 60 desks, 43 chairs) if selling prices are reduced to $1,200 for desks and $500 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 $800 for desks and $300 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,500 and other fixed expenses will remain at $6,500 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. 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 0 0 0 0 Advertising Other fixed expenses Total expenses Net income (loss) 0 0 0 Required 1 Required 2 > Required 1 Required 2 Recommend whether Santana Rey should implement the proposed changes. Recommend whether Santana Rey should implement the proposed changes.