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Santana Rey expects second quarter 2022 net income of Business Solutionss line of computer furniture to be the same as the first quarters net income (reported below) without any changes in strategy. Sales were 132 desk units (sales price of $1,250) and 72 chairs (sales price of $500).

BUSINESS SOLUTIONSComputer Furniture Segment
Segment Income Statement*
For Quarter Ended March 31, 2022
Sales		$ 201,000
Cost of goods sold		117,000
Gross profit		84,000
Selling, general, and administrative expenses
Sales commissions (10%)	$ 20,100
Advertising expenses	10,200
General and administrative expenses	20,400	50,700
Net income		$ 33,300

* Reflects activity only related to the computer furniture segment. Sales: (132 $1,250) + (72 $500) = $201,000. Cost of goods sold: (132 $750) + (72 $250) = $117,000. Santana believes that sales will total 174 desks and 123 chairs for the next quarter if selling prices are reduced to $1,150 for desks and $450 for chairs and advertising expenses are increased to $14,160 for the quarter. Product costs per unit and amounts of all other expenses will not change. Required: 1. Prepare a budgeted income statement for the computer furniture segment for the quarter ended June 30, 2022, that shows the results from implementing the proposed changes. 2. Do the proposed changes increase or decrease budgeted net income for the quarter?

Prepare a budgeted income statement for the computer furniture segment for the quarter ended June 30, 2022, that shows the results from implementing the proposed changes.

	BUSINESS SOLUTIONSCOMPUTER FURNITURE SEGMENT Budgeted Income Statements For Three Months Ended June 30, 2022 Selling, general and administrative expenses Net income

Do the proposed changes increase or decrease budgeted net income for the quarter?

	Do the proposed changes increase or decrease budgeted net income for the quarter?

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