Dalley Inc All Depreciation Charges Are Fixed and Are Expected to Remain

Dalley Inc. has the following information for its first year of operations:
$\begin{array}{lll}\text { Revenues (200,000 units) }&\$2,900,000\\\text { Manufacturing costs: } & & \\\text { Materials } & \$ 168,000 \\\text { Variable cash costs } & 142,400 \\\text { Fixed cash costs } & 327,600 \\\text { Depreciation (fixed) } & 999,000\\\text { Marketing \& administrative costs: } & \\\text { Marketing (variable) } & 422,400 \\\text { Marketing depreciation } & 149,600 \\\text { Administrative (fixed) } & 509,200 \\\text { Administrative depreciation } & 74,800 \\\text { Total costs } & \$ 2,793,000 \\ \text { Operating profits } & \$ 107,000\end{array}$
All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to increase by 15%, but sales prices are expected to fall by 4%. Material costs per unit are expected to decrease by 6%. Other unit variable manufacturing costs are expected to decrease by 2.5% per unit. Fixed manufacturing costs (other than depreciation) are expected to increase by 6%.
Variable marketing costs per unit will remain constant. Administrative costs (other than depreciation) are expected to increase by 10%.
Assume there are no inventories. Dalley operates on a cash basis.
Required:
Prepare a budgeted income statement for year 2.

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