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Required information Problem 13-53 & 13-54 (Static) (LO 13-4, 5, 6) [The following information applies to the questions displayed below.] Gulf States Manufacturing has the
Required information Problem 13-53 \& 13-54 (Static) (LO 13-4, 5, 6) [The following information applies to the questions displayed below.] Gulf States Manufacturing has the following data from year 1 operations, which are to be used for developing year 2 budget estimates: All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $29,100 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $42,000. Sales volume and prices are expected to increase by 8 percent and 3 percent, respectively. On a per-unit basis, expectations are that materials costs will increase by 6 percent and variable manufacturing costs will decrease by 5 percent. Fixed cash manufacturing costs are expected to decrease by 9 percent. Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 10 percent. Inventories are kept at zero. Gulf States operates on a cash basis. Problem 13-54 (Static) Estimate Cash from Operations (LO 13-5) Required: Estimate the cash from operations expected in year 2
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