Serial Problem Business Solutions LO P3 Santana Rey expects second quarter 2020 sales of Business Solutions's line of computer furniture to be the same as the first quarter's sales (reported below) without any changes in strategy. Monthly sales averaged 46 desk units (sales price of $1,350) and 30 chairs (sales price of $600) BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2020 Sales $240, 300 Cost of goods sold 181,800 Gross profit 58,580 Expenses Sales commissions (10%) 24,038 Advertising expenses 12,800 Other fixed expenses 21,800 Total expenses 57,030 Net income $1,479 * Reflects revenue and expense activity only related to the computer furniture segment + Revenue: (138 desks * $1,350) + (90 chairs $600) = $186,300 - $54,000 = $240,300 # Cost of goods sold: (138 desks * $850) + (90 chairs $350) - $33,000 = $181,800 Santana Rey believes that sales will increase each month for the next three months (April, 54 desks, 42 chairs, May, 58 desks, 45 chairs; June, 62 desks 48 chairs) if selling prices are reduced to $1.260 for desks and $550 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 $850 for desks and $350 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $11,000 and other fixed expenses will remain at $7,000 per month Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare budgeted income statements for the computer furniture segment for each of the months of April, May, and June that show the expected results from implementing the proposed changes. Use a three-column format, with one column for each month. (Negative balances and should be indicated with minus sign.) BUSINESS SOLUTIONS COMPUTER FURNITURE SEGMENT Budgeted Income Statements For Months of April, May, and June April May June Expenses Sales commissions Advertising Other fixed expenses Total expenses Net income (loss) Required 2 > Required: 1. Prepare budgeted income statements for the computer furniture segment for each of the months of April, May, and June that show the expected results from implementing the proposed changes. Use a three column format, with one column for each month. 2. Recommend whether Santana should implement the proposed changes. Hint. Compare quarterly income for the proposed April May June period to the quarterly income for the January February March period. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Recommend whether Santana Rey should implement the proposed changes, Recommend whether Santana Rey should implement the proposed changes, (Required 1