Exercise 13-38 Prepare Budgeted Financial Statements (LO 13-6) Cycle-1 is a fast-growing start-up firm that manufactures bicycles. The following income statement is available for October $180,000 Sales revenue (300 units @ $600 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) 26,000 27,540 Marketing and administrative costs 67,500 22,860 $ 143,900 $ 36,100 Fixed costs (cash) Depreciation (fixed) Total costs Operating profits Sales volume is expected to increase by 20 percent in November, but the sales price is expected to fall 10 percent. Variable manufacturing costs are expected to increase by 4 percent per unit in November. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 8 percent. Cycle-1 operates on a cash basis and maintains no inventories. Depreciation is fixed and should remain unchanged over the next three years