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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: $3,150,000 $ 178,000 132,400 327,600
Problem 13-52 (Algo) Estimate Cash from Operations (LO 13-5) The following information is available for year 1 for Pepper Products: $3,150,000 $ 178,000 132,400 327,600 989,000 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 422,400 159,600 509,200 74,800 $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 4 percent, but prices are expected to rise by 18 percent. Material costs per unit are expected to increase by 13 percent. Other unit variable Emanufacturing costs are expected to decrease by 10 percent per unit. Fixed cash costs are expected to increase by 5 percent. Variable marketing costs will change with unit volume. Administrative cash costs are expected to increase by 6 percent. Inventories E 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.) PEPPER PRODUCTS Cash Basis Budgeted Income Statement For Year 2 Manufacturing costs (cash) Total cash manufacturing costs Marketing and administrative costs: Total cash marketing and administrative costs Total cash costs
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