Question

The following information is available for year 1 for Dancer Components: Sales revenues (210,000 units) $ 3,150,000 Manufacturing costs Materials $ 167,000 Variable cash costs 150,300 Fixed cash costs 322,500 Depreciation 994,000 Marketing and administrative costs Marketing (variable, cash) 426,800 Marketing depreciation 143,800 Administrative (fixed, cash) 518,600 Administrative depreciation 77,100 Total costs $ 2,800,100 Operating profits $ 349,900 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 6 percent. Material costs per unit are expected to decrease by 7 percent. Other unit variable manufacturing costs are expected to decrease by 2 percent per unit. Fixed manufacturing cash costs are expected to increase by 6 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: Estimate the cash from operations expected in year 2. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

dancer comp
cash basis
for year 2
manufacturing costs
a
b
c
d
total manufacturing costs
marketing and admin costs
a
b
c
total maufacting and admin costs
total costs

Answer 1

Manufacturing Cost:-
(a) Material {(167000/210000) * 247800} * 93%	183266
(b) Variable Cash {(150300/210000) * 247800} * 98%	173807
(c) Fixed Cash (322500 * 106%)	341850
Total Manufacturing Cost	698923
Marketing & Adm Cost :-
(a) Marketing Variable {(426800/210000) * 247800)}	503624
(b) Adm fixed cash (518600 * 110%)	570460
Total Marketing & Adm cost	1074084
Total cost	1773007
Sale (210000 * 118%) * (15*94%)	3493980
Cash flow	1720973