13-51 (Static) Prepare Budgeted Financial Statements (LO 13-6) The following information is available for year 1 for Pepper Products: Sales revenue (200,000 units) $2,850,000 Manufacturing costs Materials $ 168,000 Variable cash costs 142,400 Fixed cash costs 327,600 Depreciation (fixed) 999,000 Marketing and administrative costs Marketing (variable, cash) 422,400 Marketing depreciation 149,600 Administrative (fixed, cash) 509,200 74,800 Administrative depreciation Total costs Operating profits $2,793,000 57,000 $ All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to fall by 5 percent, but prices are expected to rise by 15 percent. Material costs per unit are expected to increase by 12 percent. Other unit variable manufacturing costs are expected to decrease by 10 percent per unit. Fixed cash costs are expected to increase by 4 percent. Variable marketing costs will change with unit volume. Administrative cash costs are expected to increase by 5 percent. Inventories are kept at zero. Pepper Products operates on a cash basis. Required: Prepare a budgeted income statement for year 2. (Do not round intermediate calculations.) Variable marketing costs will change with unit volume. Administrative cash costs are expected to increase by 5 percent. Inventories are kept at zero. Pepper Products operates on a cash basis. Required: Prepare a budgeted income statement for year 2. (Do not round intermediate calculations.) PEPPER PRODUCTS Budgeted Income Statement For Year 2 Manufacturing costs: Total manufacturing costs Marketing and administrative costs: $ 0 Total marketing and administrative costs Total costs $ $ 0