Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Serial Problem Business Solutions LO P3 Santana Rey expects second-quarter 2018 sales of her new line of computer furniture to be the same as the

image text in transcribed

Serial Problem Business Solutions LO P3 Santana Rey expects second-quarter 2018 sales of her new 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, 2018 Sales $173,520 Cost of goods soldt 129,420 Gross profit 44,1ee Expenses Sales commissions (10%) 17,352 Advertising expenses 8, 40e 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 * $1,230) + (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: 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. 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 (loss)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Quest For A Science Of AccountingAn Anthology Of The Research Of Robert R. Sterling

Authors: Thomas A. Lee, Peter W. Wolnizer

1st Edition

0367698196, 9780367698195

More Books

Students also viewed these Accounting questions