Action Items
1. Analyze the results of the Business Brief Problem completed in Action Item 4.
2. Write a one-page analysis according to the Business Brief Guidelines. Complete sentences must be used (bullets are not acceptable). Your analysis must be written using a concise writing style. Your Business Brief should incorporate all of following instructions:
a. An opening paragraph briefly introducing the problem situation.
b. Analysis header – The analytical section should include a discussion of the problem results as identified in the problem requirements.
c. Conclusion header – This section should be based on the analytical requirement(s) that solicit your opinion regarding the problem. You should provide only key, relevant information and logical discussion in support of your opinion.
d. APA citation(s) and reference(s).
Requirement 1. Prepare budgeted income statements for both options assuming January sales remain $ 8 comma 000$8,000.
Begin by preparing the budgeted income statement for Option 1. (Round all amounts to the nearest whole number.)

Holly Company
Budgeted Income Statement
For the Quarter Ended March 31, 2016
January February March Total
Sales Revenue $8,000 $10,400 $13,520 $31,920
Cost of Goods Sold 3,200 4,160 5,408 12,768
Gross Profit 4,800 6,240 8,112 19,152
S and A Expenses 4,100 4,340 4,652 13,092
Operating Income 700 1,900 3,460 6,060
Income Tax Expense 210 570 1,038 1,818
Net Income $490 $1,330 $2,422 $4,242

Now prepare the budgeted income statement for Option 2. (Round all amounts to the nearest whole number.)
Holly Company
Budgeted Income Statement
For the Quarter Ended March 31, 2016
January February March Total
Sales Revenue $8,000 $10,400 $13,520 $31,920
Cost of Goods Sold 3,600 4,680 6,084 14,364
Gross Profit 4,400 5,720 7,436 17,556
S and A Expenses 2,800 3,040 3,352 9,192
Operating Income 1,600 2,680 4,084 8,364
Income Tax Expense 480 804 1,225 2,509
Net Income $1,120 $1,876 $2,859 $5,855
Requirement 2. Which option should Holly choose? Explain your reasoning. If one of the two options is chosen, it would be Option 2 because net income for the quarter is expected to be higher under this option than the other. However, because both options are expected to yield lower net income for the quarter than the $ 5 comma 992$5,992 currently budgeted, Holly may decide not to choose either of the options.