Prepare a budget.

Using the information provided below, determine the budgeted revenue and expense items for your company for 2022.

The companys annual income statement for 2021, which is used as a basis for preparing the 2022 budget, is below (shown in thousands):

Additional information to be used in preparing the budget for 2022 are as follows:

1. Selling prices of equipment are expected to increase by 10% as the economic recovery begins. The selling price of each maintenance contract is expected to remain unchanged from 2021.

2. Equipment sales in units are expected to increase by 6%, with a corresponding 6% growth in units of maintenance contracts.

3. Cost of each unit sold is expected to increase by 5% to pay for the necessary technology and quality improvements.

4. Marketing costs are expected to increase by $290,000, but administration costs are expected to remain at 2021 levels.

5. Distribution costs vary in proportion to the number of units of equipment sold.

6. Two maintenance technicians are to be hired at a total cost of $160,000, which covers wages and related travel costs. The objective is to improve customer service and shorten response time.

7. There is no beginning or ending inventory of equipment.

Company's Awwal Income Statement For the year 2021 $ 9,900,000 4,000,000 5,900,000 Reveres Equipment $ 8,000,000 Maintenance contracts 1,900,000 Total Revenues Cost of goods sold Gross margin Operating costs Marketing 630,000 Distribution 100,000 Customer Maintenance 1,100,000 Administration 920,000 Total Operating Costs Operating income 2,750,000 $ 3,150,000