Question: Required information Skip to question [ The following information applies to the questions displayed below. ] The following information is available for Fairmount Industries from

Required information
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[The following information applies to the questions displayed below.]
The following information is available for Fairmount Industries from year 1 operations:
Sales revenue (63,000 units) $ 1,725,000
Manufacturing costs
Materials $ 258,000
Variable cash costs 563,000
Fixed cash costs 345,000
Depreciation (fixed)178,000
Marketing and administrative costs
Marketing (variable, cash)189,000
Marketing depreciation 59,000
Administrative (fixed, cash)180,000
Administrative depreciation 24,000
Total costs $ 1,796,000
Operating profits (losses) $ (71,000)
All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $40,000 will be fully depreciated by the end of year 1 and will not be replaced with new equipment because it is still operating to specification. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent.
Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent. Inventories are kept at zero. Fairmount Industries operates on a cash basis. No change is expected in marketing or administrative depreciation.
Required:
Estimate the cash from operations expected in year 2.
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.

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