Serial Problem Business Solutions LO P3 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 40 desk units (sales price of $1,230) and 18 chairs (sales price of $480) BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2020 Sales $173,520 Cost of goods sold 129, 420 Gross profit 44,100 Expenses Sales conmissions (184) 17,352 Advertising expenses 8,480 Other fixed expenses 17,400 Total expenses 43, 152 Net Income 948 * Reflects revenue and expense activity only related to the computer furniture segment + Revenue: (120 desks * $1230) (54 chairs * $480) = $147,600 - $25,920 = $173,520 Cost of goods sold: (120 desks $730) + (54 chairs * $230) - $29,400 - $129,420 Santana Rey believes that sales will increase each month for the next three months (April, 48 desks, 30 chairs; May, 52 desks, 33 chairs; June, 56 desks, 36 chairs) if selling prices are reduced to $1,120 for desks and $430 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 $730 for desks and $230 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,800 and other fixed expenses will remain at $5,800 per month. Required: requires: 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. Complete this question by entering your answers in the tabs below. 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 Expenses Sales commissions Advertising Other fixed expenses Total expenses Net Income (los) fixed expenses will remain at $5,800 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Recommend whether Santana Rey should implement the proposed changes Recommend whether Santana Rey should implement the proposed changes.