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 $154$ desk units $($sales price of $$1,250)$ and $94$ chairs $($sales price of $$500).$

BUSINESS SOLUTIONS$$Computer Furniture Segment

Segment Income Statement$*$

For Quarter Ended March $31,2022$

Sales$$ $ $239,500$

Cost of goods sold$139,000$

Gross profit $100,500$

Selling, general, and administrative expenses

Sales commissions $(10\%)$ $ $23,950$

Advertising expenses $12,400$

General and administrative expenses $24,80061,150$

Net income $ $39,350$

$*$ Reflects activity only related to the computer furniture segment.

$$ Sales: $(154\backslash$times $$1,250)+(94\backslash$times $$500)=$ $$239,500.$

$$ Cost of goods sold: $(154\backslash$times $$750)+(94\backslash$times $$250)=$ $$139,000.$

Santana believes that sales will total $207$ desks and $156$ 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 $$18,120$ 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?