Emerson Manufacturing Company produces two products: Model S and Model Z. The following income statement shows this years operating results.

Emerson Manufacturing Company Income Statement For the year ended December 31
Revenue:
Model S	$300,000
Model Z	200,000	$500,000
Cost of goods sold:
Model S	150,000
Model Z	120,000	(270,000)
Gross margin		$230,000
Operating costs:
Marketing	60,000
Distribution	50,000
Depreciation	21,000
Administration	30,000	(161,000)
Operating income		$ 69,000

Emersons management is in the process of preparing next years budget. The following information is under consideration.

1. The selling price of Model S is expected to remain the same, but the units sold will increase by 6 percent
2. The selling price and units of Model Z will increase by 5 percent and 10 percent, respectively.
3. As indicated by the suppliers of key components, the cost of each unit sold will increase by 3 percent.
4. Marketing costs are expected to increase by $20,000.
5. Distribution costs remain the same fixed percentage of total sales revenue.
6. Depreciation costs remain unchanged.
7. A new administrative aide will be hired part time for $25,000.
8. There is no beginning or ending inventory.

Required:

Prepare a budgeted income statement for next year.