Santana Rey expects second-quarter 2020 sales of Business Solutionss line of computer furniture to be the same as the first quarters sales (reported below) without any changes in strategy. Monthly sales averaged 38 desk units (sales price of $1,180) and 13 chairs (sales price of $430).

BUSINESS SOLUTIONSComputer Furniture Segment
Segment Income Statement*
For Quarter Ended March 31, 2020
Sales	$	151,290
Cost of goods sold		112,440
Gross profit		38,850
Expenses
Sales commissions (10%)		15,129
Advertising expenses		6,900
Other fixed expenses		15,900
Total expenses		37,929
Net income	$	921

* Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (114 desks $1,180) + (39 chairs $430) = $134,520 + $16,770 = $151,290 Cost of goods sold: (114 desks $680) + (39 chairs $180) + $27,900 = $112,440 Santana Rey believes that sales will increase each month for the next three months (April, 46 desks, 25 chairs; May, 50 desks, 28 chairs; June, 54 desks, 31 chairs) if selling prices are reduced to $1,050 for desks and $380 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 $680 for desks and $180 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,300 and other fixed expenses will remain at $5,300 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 April May June Expenses Sales commissions Advertising Other fixed expenses Total expenses Net income (loss) Required 1 Required 2 Recommend whether Santana Rey should implement the proposed changes. Recommend whether Santana Rey should implement the proposed changes