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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 45 desk units (sales price of $1,340) and 29 chairs (sales price of $590).

BUSINESS SOLUTIONSComputer Furniture Segment
Segment Income Statement*
For Quarter Ended March 31, 2020
Sales	$	232,230
Cost of goods sold		175,680
Gross profit		56,550
Expenses
Sales commissions (10%)		23,223
Advertising expenses		11,700
Other fixed expenses		20,700
Total expenses		55,623
Net income	$	927

* Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (135 desks $1,340) + (87 chairs $590) = $180,900 + $51,330 = $232,230 Cost of goods sold: (135 desks $840) + (87 chairs $340) + $32,700 = $175,680 Santana Rey believes that sales will increase each month for the next three months (April, 53 desks, 41 chairs; May, 57 desks, 44 chairs; June, 61 desks, 47 chairs) if selling prices are reduced to $1,250 for desks and $540 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 $840 for desks and $340 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,900 and other fixed expenses will remain at $6,900 per month.

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