JECT $($Required$)$ i

SP $22$ Serial Problem Business Solutions $($Algo$)$ LO P$3$

Santana Rey expects second quarter $2022$ net income of Business Solutions's line of computer furniture to be the same as the first quarter's net income $($reported below$)$ without any changes in strategy. Sales were $126$ desk units $($sales price of $$1,250)$ and $66$ chairs $($sales price of $$500).$

Reflects activity only related to the computer furniture segment.

$$ Sales: $(126$$$1,250)+(66$$$500)=$$$190,500.$

$$ Cost of goods sold: $(126$$$750)+(66$$$250)=$$$111,000.$

Santana believes that sales will total $165$ desks and $114$ 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 $$13,080$ for the quarter. Product costs per unit and amounts of all other expenses will not change.

Required:

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.

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

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