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SP 20 Serial Problem Business Solutions (Algo) LO P3 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 152 desk units (sales price of $1,250) and 92 chairs (sales price of $500). BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement* For Quarter Ended March 31, 2022 Salest Cost of goods solat Gross profit Selling, general, and administrative expenses Sales commissions (10%) $ 23,600 Advertising expenses 12,200 General and administrative expenses 24,400 Net income $ 236,000 137,000 99,000 60,200 $ 38,800 * Reflects activity only related to the computer furniture segment. † Sales: (152 * $1,250) + (92 * $500) = $236,000. # Cost of goods sold: (152 * $750) + (92 $250) = $137,000. Santana believes that sales will total 204 desks and 153 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 $17,760 for the quarter. Product costs per unit and amounts of all other expenses will not change. Required: 1. 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. 2. Do the proposed changes increase or decrease budgeted net income for the quarter?
Required 1 Required 2 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. BUSINESS SOLUTIONS—COMPUTER FURNITURE SEGMENT Budgeted Income Statements For Three Months Ended June 30, 2022 Selling, general and administrative expenses Net income Required 1 Required 2
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Do the proposed changes increase or decrease budgeted net income for the quarter? Do the proposed changes increase or decrease budgeted net income for the quarter? < Required 1 Required 2 >