Scenario 1: A 3% decrease in the selling price of the Casual table and a 3% decrease in the selling price of the Deluxe table. Scenario 2: A 5% increase in the price per board foot of red oak and a 5% increase in the price per square foot of granite. Exhibit 6-4 presents the budgeted operating income for the two scenarios. Note that under Scenario 1, a change in selling prices per table affects revenues (Schedule 1) as well as variable marketing costs (sales commissions, Schedule 8). The Problem for Self-Study at the end of the chapter shows the revised schedules for Scenario 1. Similarly, a change in the price of direct materials affects the direct material usage budget (Schedule 3A), the unit cost of ending finished goods inventory (Schedule 6A), the ending Exhibit 6-4 Effect of Changes in Budget Assumptions on Budgeted Operating Income for Stylistic Furniture Home Insert Review View A Page Layout Formulas Data B D Key Assumptions E F G H I 1 Direct Material Cost 2 Units Sold Selling Price Casual What If 3 Scenario 4 Master budget 5 Scenario 1 6 Scenario 2 Casual 50,000 50,000 50,000 Deluxe 10,000 10,000 10,000 Deluxe $800 776 800 $600 582 600 Red Oak $7.00 $7.00 $7.35 Budgeted Operating Income Change from Dollars Master Budget $4,860,000 3,794,100 22% decrease 4,483,800 8% decrease Granite $10.00 $10.00 $10.50 Scenario 1: A 3% decrease in the selling price of the Casual table and a 3% decrease in the selling price of the Deluxe table. Scenario 2: A 5% increase in the price per board foot of red oak and a 5% increase in the price per square foot of granite. Exhibit 6-4 presents the budgeted operating income for the two scenarios. Note that under Scenario 1, a change in selling prices per table affects revenues (Schedule 1) as well as variable marketing costs (sales commissions, Schedule 8). The Problem for Self-Study at the end of the chapter shows the revised schedules for Scenario 1. Similarly, a change in the price of direct materials affects the direct material usage budget (Schedule 3A), the unit cost of ending finished goods inventory (Schedule 6A), the ending Exhibit 6-4 Effect of Changes in Budget Assumptions on Budgeted Operating Income for Stylistic Furniture Home Insert Review View A Page Layout Formulas Data B D Key Assumptions E F G H I 1 Direct Material Cost 2 Units Sold Selling Price Casual What If 3 Scenario 4 Master budget 5 Scenario 1 6 Scenario 2 Casual 50,000 50,000 50,000 Deluxe 10,000 10,000 10,000 Deluxe $800 776 800 $600 582 600 Red Oak $7.00 $7.00 $7.35 Budgeted Operating Income Change from Dollars Master Budget $4,860,000 3,794,100 22% decrease 4,483,800 8% decrease Granite $10.00 $10.00 $10.50