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Merline Manufacturing makes its product for $65 per unit and sells it...

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Accounting

Merline Manufacturing makes its product for $65 per unit and sells it for $131 per unit. The sales staff receives a commission of 10% of
sales. Its December income statement follows.
Management expects December's results to be repeated in January, February, and March without any changes in strategy.
Management, however, has an alternative plan. It believes that if the unit selling price is reduced to $116 per unit and advertising is
increased to $222,200 per month, sales units will be 11,000 for January, 12,100 for February, and 13,310 for March. The cost of its
product will remain at $65 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 results from implementing
the proposed plan.
For the proposed plan, is income in March budgeted to be higher than income in December?
Complete this question by entering your answers in the tabs below.
Prepare budgeted income statements for each of the months of January, February, and March that show results from
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