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Somebody please help me with this Question. I tried doing it but I do't think it's correct. Thank you. Merline Manufacturing makes its product for
Somebody please help me with this Question. I tried doing it but I do't think it's correct. Thank you.
Merline Manufacturing makes its product for $70 per unit and sells it for $132 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows MERLINE MANUFACTURING Income Statement For Month Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $1,320,000 700,000 620,000 Sales commissions ( 10% ) Advertising Store rent Administrative salaries Depreciation-office equipment Other expenses Total expenses 132,000 204,000 24,200 41,000 51,000 12,200 464,400 $155,600 Net income Management expects December's results to be repeated in January, February, and March of 2018 without any changes in strategy. Management, however, has an alternative plan. It believes that unit sales will increase at a rate of 10% each month for the next three months (beginning with January) if the item's selling price is reduced to $117 per unit and advertising expenses are increased by 15% and remain at that level for all three months. The cost of its product will remain at $70 per unit, the sales staff will continue to earn a 10% commission, and the remaining expenses will stay the same Required: Prepare budgeted income statements for each of the months of January, February, and March that show the expected results from implementing the proposed changes. (Enter your final answers in whole dollars.) MERLINE MANUFACTURING Budgeted Sales For Months of January, February, and March, 2018 January February March Budgeted sales (in units) Budgeted selling price per unit Budgeted sales (in dollars) 11,000 12,100 13,310 $ 1,287,000 1,415,700 1,557,270 MERLINE MANUFACTURING Budgeted Income Statement For Months of January, February, and March, 2018 February January March Sales $ 1,287,000$ 1,415,700$ 1,557,270Step by Step Solution
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