b. Prepare the direct material for Mullullululllll a retailer in a shopping mall. budget Hancock Stores, E9-5A. and Evaluate Budgeted Income Statement Fairfield ended: prepared the following income statement for its operations for the month just FAIRFIELD STORES Income Statement for the Month Ended April 30, 2016 $500,000 240,000 Sales Cost of goods sold. $260,000 Gross profit. Operating expenses: $25,000 Sales commissions expense 60,000 Advertising expense 20,000 Lease expense 10,000 Depreciation expense. 30,000 Salaries expense. 15,000 160,000 Other operating expenses $100,000 Income before income taxes 30,000 Income tax expense 70,000 Net income Sales commissions were 5% of sales. Income taxes were 30% of income before income taxes. Both should continue at the same rate for the remainder of the year. Fairfield Stores is preparing the budget for the month of May 2016. If no basic changes are made, Fairfield management expects that the income statement would be virtually identical to the one for However, Fairfield's management has decided to make some changes in the operations. The April. plans include the following l. Increase advertising expense by 40%. 2. Decrease all selling prices by 10% 3. Increase the number of units sold by 25% as a result of the first two changes