5 Required information Part 2 of 2 [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: 2.27 points $1,935,000 eBook $ 345,000 471,000 189,000 233,000 . Sales revenues (21,500 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 Print 244,000 59,000 236,000 $ 21,000 $1,798,000 $ 137,000 References All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $15,450 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $21,900. Sales volume and prices are expected to increase by 10 percent and 6 percent, respectively. On a per-unit basis, expectations are that materials costs will increase by 8 percent and variable manufacturing costs will decrease by 2 percent. Fixed cash manufacturing costs are expected to decrease by 6 percent. Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 6 percent. Inventories are kept at zero. Gulf States operates on a cash basis. Required: Estimate the cash from operations expected in year 2. (Do not round Intermediate calculations.) GULF STATES MANUFACTURING Cash Basis Budgeted Income Statement For Year 2 Sales revenue Manufacturing costs: Materials Variable cash costs Fixed cash costs $ 0 Total manufacturing costs Marketing and administrative costs Marketing (variable, cash) Administrative (fixed, cash) Total cash marketing and administrative costs $ 0 Total cash costs $ 0 Cash operating profit