13-36 The following information is available for year 1 for Dancer Components:

Price: $2.50


The following information is available for year 1 for Dancer Components:

Revenues (300,000 units)	5,700,000
Manufacturing costs
Materials	336,000
Variable cash costs	284,800
Fixed cash costs	655,200
Depreciation (fixed)	1,998,000
Marketing and administrative costs
Marketing (variable, cash)	844,800
Marketing depreciation	299,200
Administrative (fixed, cash)	1,018,400
Administrative depreciation	149,600
Total costs	5,586,000
Operating profits	114,000

All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is
expected to increase by 18 percent, but prices are expected to fall by 5 percent. Material costs per
unit are expected to decrease by 8 percent. Other unit variable manufacturing costs are expected to
decrease by 2 percent per unit. Fixed manufacturing costs are expected to increase by 5 percent.

Variable marketing costs will change with volume. Administrative cash costs are expected to
increase by 10 percent. Inventories are kept at zero. Dancer operates on a cash basis.

Required
Prepare a budgeted income statement for year 2.