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 Sales revenues (13,000 units) $ 1170,000 Variable cash costs Fixed cash costs Depreciation (fixed) $ 209,000 285,000 114,000 40,000 Marketing and administrative costs 48,000 36,000 144,000 $ 13,000 $1,089,000 $81,000 Marketing (variable, cash) Administrative (fixed, cash) Total costs Operating profits All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $15,650 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $22,100. Sales volume and prices are expected to increase by 8 percent and 4 percent, respectively. On a per-unit basis, expectations are that materials costs will increase by 6 percent and variable manufacturing costs will decrease by 2 percent. Fixed cash manufacturing costs are expected to decrease by 4 percent. Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 4 percent. Inventories are kept at zero. Gulf States operates on a cash basis