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Santana Rey expects second-quarter 2020 sales of Business Solutions's line of computer furniture to be the same as the first quarter's sales (reported below) without any changes in strategy. Monthly sales averaged 41 desk units (sales price of $1,240) and 19 chairs (sales price of $490). BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2020 Sales $180,450 Cost of goods solat 134,400 Gross profit 46,050 Expenses Sales commissions (10%) 18,045 Advertising expenses 8,700 Other fixed expenses 17,700 Total expenses 44,445 Net income $ 1,605 * Reflects revenue and expense activity only related to the computer furniture segment. + Revenue: (123 desks * $1,240) + (57 chairs * $490) = $152,520 + $27,930 = $180,450 # Cost of goods sold: (123 desks * $740) + (57 chairs $240) + $29,700 = $134,400 Santana Rey believes that sales will increase each month for the next three months (April, 49 desks, 31 chairs; May, 53 desks, 34 chairs; June, 57 desks, 37 chairs) if selling prices are reduced to $1,130 for desks and $440 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 $740 for desks and $240 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,900 and other fixed expenses will remain at $5,900 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. 2. Recommend whether Santana should implement the proposed changes. Hint. Compare quarterly income for the proposed April- May-June period to the quarterly income for the January February March period. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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. (Negative balances and should be indicated with minus sign.) BUSINESS SOLUTIONS-COMPUTER FURNITURE SEGMENT Budgeted Income Statements For Months of April, May, and June May April June Expenses Sales commissions Advertising Other fixed expenses Total expenses Net income (loss) 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. 2. Recommend whether Santana should implement the proposed changes. Hint. Compare quarterly income for the proposed April- May-June period to the quarterly income for the January-February-March period. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Recommend whether Santana Rey should implement the proposed changes. Recommend whether Santana Rey should implement the proposed changes.

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