Management expects December's results to be repeated in January, February, and March without any

changes in strategy. Management, however, hus an alternative plan. It believes that if the unit selling

price is reduced to $125 per unit and advertising is increased to $287,500 per month, sales units will be

16.500 for January, 18,150 for February, and 19,965 for March. The cost of its product will remain ut

$75 per unit, the sales staff will continue to cam a 10% commission, and the remaining expenses will stay

the same.

Required

1. Prepure budgeted incoase statements for each of the months of January, February, and March that

show results from implementing the proposed plan. Use a three-column format, with one column for

each months. Ignore income taxes.

2. For the proposed plan, is income in March budgeted to be higher than income in December?