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 148 desk units (sales price of $1,250) and 88 chairs (sales price of $500). BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement* For Quarter Ended March 31, 2022 Sales Cost of goods sold* Gross profit Selling, general, and administrative expenses Sales commissions (10%) Advertising expenses General and administrative expenses Net income $ 22,900 11,800 23,600 * Reflects activity only related to the computer furniture segment. † Sales: (148 × $1,250) + (88 × $500) = $229,000. + Cost of goods sold: (148 x $750) + (88 × $250) = $133,000. $ 229,000 133,000 96,000 58,300 $ 37,700 Santana believes that sales will total 198 desks and 147 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 $17,040 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?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Please avoid solution image based thnx

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 148 desk units (sales price of $1,250) and 88 chairs
(sales price of $500).
BUSINESS SOLUTIONS-Computer Furniture Segment
Segment Income Statement *
For Quarter Ended March 31, 2022
Sales+
Cost of goods sold*
Gross profit
Selling, general, and administrative expenses
Sales commissions (10%)
Advertising expenses
General and administrative expenses
Net income
$ 22,900
11,800
23,600
* Reflects activity only related to the computer furniture segment.
† Sales: (148 × $1,250) + (88 × $500) = $229,000.
‡ Cost of goods sold: (148 × $750) + (88 × $250) = $133,000.
$ 229,000
133,000
96,000
58,300
$ 37,700
Santana believes that sales will total 198 desks and 147 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 $17,040 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?
Transcribed Image Text: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 148 desk units (sales price of $1,250) and 88 chairs (sales price of $500). BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement * For Quarter Ended March 31, 2022 Sales+ Cost of goods sold* Gross profit Selling, general, and administrative expenses Sales commissions (10%) Advertising expenses General and administrative expenses Net income $ 22,900 11,800 23,600 * Reflects activity only related to the computer furniture segment. † Sales: (148 × $1,250) + (88 × $500) = $229,000. ‡ Cost of goods sold: (148 × $750) + (88 × $250) = $133,000. $ 229,000 133,000 96,000 58,300 $ 37,700 Santana believes that sales will total 198 desks and 147 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 $17,040 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
Net income
Budgeted Income Statements
For Three Months Ended June 30, 2022
Selling, general and administrative expenses
$
0
0
0
Transcribed Image Text: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 Net income Budgeted Income Statements For Three Months Ended June 30, 2022 Selling, general and administrative expenses $ 0 0 0
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Ratio Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education