Merline Manufacturing makes its product for $55 per unit and sells it for $135 p

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Merline Manufacturing makes its product for $55 per unit and sells it for $135 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows.

bat. Import bockmaks Help Sav& Che Ch 20 Connect Assignment Mcrtine Manufacturing makes ts proxtuct for $55 per unit and sells t for $135 per unit. The sales staff receives a 10% commise the sale of each unit. Its December income statement follows 13 125 points 1,550,O Cost of goods sald Grass profit ales comissions (ent) Advertising 135,099 210,00 Depreciation Office equipment Net income 323,000 Management expects December's Management, however, has an alt results to be repeated in January, February, and March of 2018 without any changes in strat of 10% each month for the next ernative plan It believes that unit sales will increase at a rat f the item's seling price is reduced to $120 per unit and advertising expenses are increased t and remain at that level for all three months. The cost of its product will remain at $55 per unit, the sales staff will continue to e 10% commission, and the remaing expenses will stay the same Required: Prepare budgeted income statements for each of the months of January, February, and March that show the expected results f mplementing the proposed changes. (Enter your final answers in whole dollars.) Budgeted Sales For Months of January. February, and March, 2018 March Budgeted sales (in delars Prey 13 of 13 hp 1702

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Working:

MERLINE MANUFACTURING Budgeted Income Statement for the months of January, February and March 2018 January February March Sales 1320000 1452000 1597200 Cost of goods sold 605000 665500 732050 Gross Profit 715000 786500 865150 Expenses:    Sales commission (10% of sales) 132000 145200 159720    Advertising 262500 262500 262500    Store Rent 24500 24500 24500    Administrative Salaries 42500 42500 42500    Depreciation - Office Equipment 52500 52500 52500    Other Expenses 12500 12500 12500    Total Expenses 526500 539700 554220 Net income 188500 246800 310930

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