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 38 desk units (sales price of $1160) and 11 chairs (sales price of $410) BUSINESS SOLUTIONS Computer burniture Segment Segment Income Statement Por Quarter Ended March 31, 2020 Sales $145,790 Cont of goods sold! 107,820 Gross profit 37.950 txpenses Sales commissions (101) 14,577 Advertising expenses 6,300 Other fixed expenses 15,300 Total expenses 36,177 Net income $ 1.773 .Reflects revenue and expense activity only related to the computer furniture segment Revenue: (114 desks $1,160) + (33 chairs $410) = $132,240 +$13,530 - $145,770 Cost of goods sold: (114 desks * $660) + (33 chairs * $160) - $27,300 - $107.820 Santana Rey believes that sales will increase each month for the next three months (April, 46 desks, 23 chairs, May, 50 desks, 26 chairs: June, 54 desks, 29 chairs) if selling prices are reduced to $1,020 for desks and $360 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 $660 for desks and $160 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,100 and other fixed expenses will remain at $5,100 per month Saved Santana Rey believes that sales will increase each month for the next three months (April, 46 desks, 23 chairs: May, 50 desks, 26 chairs; June, 54 desks, 29 chairs) if selling prices are reduced to $1,020 for desks and $360 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 $660 for desks and $160 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,100 and other fixed expenses will remain at $5,100 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 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 Salos commissions Advertising Other faced expenses Total expenses Net income (ons) 0 0 0 0 0 A 11 Cost of goods sold: (114 desks * $660) + (33 chairs * $160) + $27,300 = $107.820 Santana Rey believes that sales will increase each month for the next three months (April, 46 desks, 23 chairs; May, 50 desks, 26 chairs: June, 54 desks, 29 chairs) If selling prices are reduced to $1,020 for desks and $360 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 $660 for desks and $160 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,100 and other fixed expenses will remain at $5,100 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.