Merline Manufacturing makes its product for 50 per unit and

Merline Manufacturing makes its product for $50 per unit and sells it for $145 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows. MERLINE MANUFACTURING Income Statement For Month Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $1,450,000 50e,000 958,000 Sales commissions (10%) Advertising Store rent Adninistrative salaries Depreciation-Office equipment Other expenses Total expenses 145,800 230,8e0 25, 500 47,500 57,500 13.500 519,e00 Net incone 431,000 Management expects December\'s results to be repeated in January, February, and March of 2018 without any changes in strategy Management, however, has an alternative plan t believes that unitsales wil increase at a rate of 10% each month for the next three months (beginning with January) if the item\'s selling price is reduced to $130 per unit and advertising expenses are increased by 25% and remain at that level for all three months. The cost of its product will remain at $50 per unit, the sales staff will continue to earn a 10% commission, and the remaining 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 from implementing the proposed changes. (Enter your final answers in whole dollars

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MERLINE MANUFACTURING
Budgeted sales
For months of January, February and March 2018
	January	February	March
Budgeted sales in units	($1,450,000/$145)*110% = 11,000	11,000*110% = 12,100	12,100*110% = 13,310
Unit price	$                                                            130	$                                     130	$                                     130
Budgeted sales in dollars	$                                                1,430,000	$                         1,573,000	$                         1,730,300