* Reflects revenue and expense activity only related to the computer furniture segment. t Revenue: (123 desks × $1,240) + (57 chairs × $490) = $152,520 + $27,930 = $180,450 ‡ Cost of goods sold: (123 desks × $740) + (57 chairs × $240) + $29,700 = $134,400 Santana Rey believes that sales will increase each month for the next three months (April, 49 desks, 31 chairs; May, 53 desks, 34 chairs; June, 57 desks, 37 chairs) if selling prices are reduced to $1,130 for desks and $440 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 $740 for desks and $240 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,900 and other fixed expenses will remain at $5,900 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.
* Reflects revenue and expense activity only related to the computer furniture segment. t Revenue: (123 desks × $1,240) + (57 chairs × $490) = $152,520 + $27,930 = $180,450 ‡ Cost of goods sold: (123 desks × $740) + (57 chairs × $240) + $29,700 = $134,400 Santana Rey believes that sales will increase each month for the next three months (April, 49 desks, 31 chairs; May, 53 desks, 34 chairs; June, 57 desks, 37 chairs) if selling prices are reduced to $1,130 for desks and $440 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 $740 for desks and $240 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,900 and other fixed expenses will remain at $5,900 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please answer all with working please answer all with everything like explanation , computation , formulation with steps please answer in text not image thanks no copy paste need complete and correct answer
![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 41 desk units (sales price of $1,240) and 19 chairs
(sales price of $490).
BUSINESS SOLUTIONS-Computer Furniture Segment
Segment Income Statement*
For Quarter Ended March 31, 2020
Sales*
Cost of goods sold*
Gross profit
Expenses
Sales commissions (10%)
Advertising expenses
Other fixed expenses
Total expenses
Net income
$180,450
134,400
46,050
18,045
8,700
17,700
44,445
$ 1,605
* Reflects revenue and expense activity only related to the computer furniture segment.
t Revenue: (123 desks x $1,240) + (57 chairs x $490) = $152,520 + $27,930 = $180,450
‡ Cost of goods sold: (123 desks x $740) + (57 chairs × $240) + $29,700 = $134,400
Santana Rey believes that sales will increase each month for the next three months (April, 49 desks, 31 chairs; May, 53 desks, 34
chairs; June, 57 desks, 37 chairs) if selling prices are reduced to $1,130 for desks and $440 for chairs and advertising expenses are
lovol for all three months. The producte' variable cost will remain at $740 for docks and $240 for](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4d9be368-c762-452d-977c-158f53c3cb77%2F2cdfe271-76a9-425c-969e-914127d5ce88%2Fb25j1a_processed.png&w=3840&q=75)
Transcribed Image Text: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 41 desk units (sales price of $1,240) and 19 chairs
(sales price of $490).
BUSINESS SOLUTIONS-Computer Furniture Segment
Segment Income Statement*
For Quarter Ended March 31, 2020
Sales*
Cost of goods sold*
Gross profit
Expenses
Sales commissions (10%)
Advertising expenses
Other fixed expenses
Total expenses
Net income
$180,450
134,400
46,050
18,045
8,700
17,700
44,445
$ 1,605
* Reflects revenue and expense activity only related to the computer furniture segment.
t Revenue: (123 desks x $1,240) + (57 chairs x $490) = $152,520 + $27,930 = $180,450
‡ Cost of goods sold: (123 desks x $740) + (57 chairs × $240) + $29,700 = $134,400
Santana Rey believes that sales will increase each month for the next three months (April, 49 desks, 31 chairs; May, 53 desks, 34
chairs; June, 57 desks, 37 chairs) if selling prices are reduced to $1,130 for desks and $440 for chairs and advertising expenses are
lovol for all three months. The producte' variable cost will remain at $740 for docks and $240 for
![* Reflects revenue and expense activity only related to the computer furniture segment.
t Revenue: (123 desks x $1,240) + (57 chairs x $490) = $152,520 + $27,930 = $180,450
+ Cost of goods sold: (123 desks × $740) + (57 chairs × $240) + $29,700 = $134,400
Santana Rey believes that sales will increase each month for the next three months (April, 49 desks, 31 chairs; May, 53 desks, 34
chairs; June, 57 desks, 37 chairs) if selling prices are reduced to $1,130 for desks and $440 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 $740 for desks and $240 for
chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,900 and other
fixed expenses will remain at $5,900 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4d9be368-c762-452d-977c-158f53c3cb77%2F2cdfe271-76a9-425c-969e-914127d5ce88%2Ft947d5f_processed.png&w=3840&q=75)
Transcribed Image Text:* Reflects revenue and expense activity only related to the computer furniture segment.
t Revenue: (123 desks x $1,240) + (57 chairs x $490) = $152,520 + $27,930 = $180,450
+ Cost of goods sold: (123 desks × $740) + (57 chairs × $240) + $29,700 = $134,400
Santana Rey believes that sales will increase each month for the next three months (April, 49 desks, 31 chairs; May, 53 desks, 34
chairs; June, 57 desks, 37 chairs) if selling prices are reduced to $1,130 for desks and $440 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 $740 for desks and $240 for
chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $9,900 and other
fixed expenses will remain at $5,900 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
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