Prepare budgeted financial statement Gulf states manufacturing has the following data from year 1 operation, which are to be used for developing year 2 budget estimates.

Sales Revenue(37,500) $ 2,500,000

Manufacturing costs Material $ 400,000

Variable Cash costs 545,000

Fixed Cash Costs 216,000

Depreciation (fixed) 267,000

Marketeting and Admin costs

Marketing (variable cost) 285,000

Marketing Depreccation 67,800

Administration (fixed, cash) 270,300

Administration Depreciation 25,200

Total Costs $ 2076,300

Operating Profits $ 423,700

Additional information

- Annual Depreciation on old manufacturing equipment $ 29,100

- Annual Depreciation on new equipment acquired in year 2 $ 42,000

Year 2 expectation

- % increase in sales volume 8%

- % increase in prices 3%

- % increase in material cost per unit 6%

- % decrease in other unit variable manuf. cost per unit 5%

- % decrease in fixed cash manufacturing costs 9%

- % increase in administrative cash costs 10%

Required:

Prepare a budgeted income Statement for year 2