Merline Manufacturing makes its product for $ per unit and sells it for $ per unit. The sales staff receives a commission of of
sales. Its December income statement follows.
Management expects December's results to be repeated in January, February, and March without any changes in strategy.
Management, however, has an alternative plan. It believes that if the unit selling price is reduced to $ per unit and advertising is
increased to $ per month, sales units will be for January, for February, and for March. The cost of its
product will remain at $ per unit, the sales staff will continue to earn a commission, and the remaining expenses will stay the
same.
Required:
Prepare budgeted income statements for each of the months of January, February, and March that show results from implementing
the proposed plan.
For the proposed plan, is income in March budgeted to be higher than income in December?
Complete this question by entering your answers in the tabs below.
Prepare budgeted income statements for each of the months of January, February, and March that show results from
