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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 37 desk units (sales price of $1150) and 10 chairs (sales price of $400) BUSINESS SOLUTIONS--Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2020 Sales $139,650 Cost of goods solat 103,650 Gross profit 36,000 Expenses Sales commissions (10%) 13,965 Advertising expenses 6.000 Other fixed expenses 15.900 Total expenses 34,965 Net income $ 1,035 Reflects revenue and expense activity only related to the computer furniture segment. Revenue: (111 desks * $1150) + (30 chairs * $400) = $127650 + $12.000 $139,650 # Cost of goods sold: (111 desks * $650) + (30 chairs * $150) - $27,000 - $103,650 Santana Rey believes that sales will increase each month for the next three months (April, 45 desks, 22 chairs, May, 49 desks. 25 chairs: June, 53 desks, 28 chairs) if selling prices are reduced to $1010 for desks and $350 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 $650 for desks and $150 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,000 and other Santana Rey believes that sales will increase each month for the next three months (April, 45 desks, 22 chairs; May, 49 desks, 25 chairs; June, 53 desks, 28 chairs) if selling prices are reduced to $1,010 for desks and $350 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 $650 for desks and $150 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,000 and other fixed expenses will remain at $5,000 per month. 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 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 balonces and should be indicated with minus sign.) 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 forced expenses Total expenses Net Income (loss)

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