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i Requirements - X Soya Company prepared the following budgeted income statement for the first quarter is considering two options. EEE(Click the icon to view the budgeted income statement.) con to view the options.) 1. Prepare budgeted income statements for both options, assuming both options ements begin in January and January sales remain $20,000. Round all calculations to Begin by preparing the budgeted income statement for Option 1 the nearest dollar. Soya Company 2. Which option should Soya choose? Explain your reasoning. Budgeted Income Statement - X For the Quarter Ended March 31, 2024 Print Done January February March Total Sales Revenue Soya Company Cost of Goods Sold Budgeted Income Statement Gross Profit For the Quarter Ended March 31, 2024 S and A Expenses January February March Total Operating Income Net Sales Revenue (5% increase per month) 20,000 21,000 S 22,050 S 63,050 Income Tax Expense Cost of Goods Sold (60% of sales) 12,000 12,600 13,230 37,830 Net Income Gross Profit 8,000 &,400 8,820 25,220 S and A Expenses ($3,000 + 10% of sales) 5,000 5,100 5.205 15,305 Now prepare the budgeted income statement for Option 2. (Round all amounts to the n Operating Income 3,000 3,300 3,615 9,915 Soya Company Income Tax Expense (20% of operating income) 600 660 723 1983 Budgeted Income Statement Net Income 2,400 S 2,640 S 2,892 S 7,932 For the Quarter Ended March 31, 2024 January February March Total Sales Revenue i More Info - X Cost of Goods Sold Gross Profit Option 1 is to increase advertising by $500 per month. Option 2 is to use S and A Expenses better-quality materials in the manufacturing process. The better materials will increase the cost of goods sold to 65% but will provide a better product at the Operating Income same sales price. The marketing manager projects either option will result in sales increases of 10% per month rather than 5%. Income Tax Expense not to choose either of the options. Net Income Print Done to choose Option 1 Requirement 2. Which option should Soya choose? Explain your reasoning. to choose Option 2 If one of the two options is chosen, it would be because net income for the quarter is expected to be higher under this option. However, because both options are expected to yield net income for the quarter than the $7,932 currently budgeted, Soya may decide O