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Problem 13-52 (Algo) Estimate Cash from Operations (LO 13-5) The following information is available for year 1 for Pepper Products: Sales revenue (210,000 units)
Problem 13-52 (Algo) Estimate Cash from Operations (LO 13-5) The following information is available for year 1 for Pepper Products: Sales revenue (210,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits $3,150,000 $ 178,000 142,400 327,600 999,000 432,400 149,600 499,200 64,800 $2,793,000 $ 357,000 All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to fall by 6 percent, but prices are expected to rise by 18 percent. Material costs per unit are expected to increase by 11 percent. Other unit variable manufacturing costs are expected to decrease by 8 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 8 percent. Inventories are kept at zero. Pepper Products operates on a cash basis. Required: Estimate the cash from operations expected in year 2. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)
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