Question - Cameron Parts has the following data from year 1 operations, which are to be used for developing year 2 budget estimates:

Revenues (12,500 units) . . . . . . . . . .$ 1,119,000

Manufacturing costs

Materials . . . . . . . . . . . . . . . 199,500

Variable cash costs . . . . . . . . . . 271,350

Fixed cash costs . . . . . . . . . . . . . . 108,000

Depreciation (fixed) . . . . . . . . . . . .133,500

Marketing and administrative costs

Marketing (variable, cash) . . . . . . . .142,500

Marketing depreciation . . . . . . . . . .33,900

Administrative (fixed, cash) . . . . . . . 135,165

Administrative depreciation . . . . . . .2,600

Total costs . . . . . . . . . . . . . . . . . .$1,036,515

Operating profits . . . . . . . . . .$ 82,485

All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $14,550 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $21,000. Sales volume and prices are expected to increase by 12 percent and 6 percent, respectively. On a per unit basis, expectations are that materials costs will increase by 10 percent and variable manufactur- ing costs will decrease by 4 percent. Fixed manufacturing costs are expected to decrease by 7 percent.

Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 8 percent. Inventories are kept at zero. Cameron operates on a cash basis.

Required - Prepare a budgeted income statement for year 2.