Gulf States Manufacturing has the following data from year 1 operations, which are to be used for developing year 2 budget estimates:

Sales revenues (19,500 units)	$	1,755,000
Manufacturing costs
Materials	$	313,000
Variable cash costs		427,000
Fixed cash costs		171,000
Depreciation (fixed)		211,000
Marketing and administrative costs
Marketing (variable, cash)		220,000
Marketing depreciation		53,000
Administrative (fixed, cash)		212,000
Administrative depreciation	$	19,000
Total costs	$	1,626,000
Operating profits	$	129,000

All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $15,250 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $21,700. Sales volume and prices are expected to increase by 12 percent and 6 percent, respectively. On a per-unit basis, expectations are that materials costs will increase by 10 percent and variable manufacturing costs will decrease by 2 percent. Fixed cash manufacturing costs are expected to decrease by 7 percent.

Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 8 percent. Inventories are kept at zero. Gulf States operates on a cash basis.

Required:

Prepare a budgeted income statement for year 2. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)

Gulf States Manufacturing has the following data from year 1 operations, which are to be used for developing year 2 budget estimates:

Sales revenues (19,500 units)	$	1,755,000
Manufacturing costs
Materials	$	313,000
Variable cash costs		427,000
Fixed cash costs		171,000
Depreciation (fixed)		211,000
Marketing and administrative costs
Marketing (variable, cash)		220,000
Marketing depreciation		53,000
Administrative (fixed, cash)		212,000
Administrative depreciation	$	19,000
Total costs	$	1,626,000
Operating profits	$	129,000

All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $15,250 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $21,700. Sales volume and prices are expected to increase by 12 percent and 6 percent, respectively. On a per-unit basis, expectations are that materials costs will increase by 10 percent and variable manufacturing costs will decrease by 2 percent. Fixed cash manufacturing costs are expected to decrease by 7 percent.

Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 8 percent. Inventories are kept at zero. Gulf States operates on a cash basis.

Prepare a budgeted income statement for year 2. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)