ACCT-202 Accounting for Decision Making II Case Assignment Preparation of Master Budget ErcshPak Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables. The canned food box (type C) and the perishable food box (type P) have the following material and labor requirements. Type of Box Direct material required per 100 boxes: Paperboard (S.20 per pound) Corrugating medium (S.10 per pound) Direct labor required per 100 boxes (S12.00 per hour) 25 hour .50 hour 30 pounds 20 pounds 70 pounds 30 pounds costs are anticipated for the next year. T The following rate is based on a production volume of 495,000 units for each type of box. Production overhead is applicd on the basis of direct-labor hours. he predetermined overhead Indirect material S 10,500 Indirect labor 50,000 Utilitics Property taxes 18,000 Insurancc Depreciation 29,000 Total 25,000 16,000 S148,500 The following selling and administrative expenses are anticipated for the next year. Salaries and fringe benefits of sales personnel S 75,000 15,000 90,000 26,000 4,000 $210,000 Management salaries and fringe benefits Clerical wages and fringe benefits Total The sales forecast for the next vear is as follows: Sales Volume Sales Price Box type C 500,000 boxes $90.00 per hundred boxes Box type P 500,000 boxes 130.00 per hundred boxes The following inventory information is available for the next year. The unit production costs for each product are expected to be the same this year and next year Expected Inventory Desired Ending Inventory January 1 December 31 Finished goods: Box type C Box type P Raw material: 10,000 boxes 5,000 boxes 15,000 boxes 20,000 boxes 15,000 pounds 5,000 pounds 10,000 pounds Corrugating medium5,000 pounds Required: Prepare a master budget for KresbPak Corporation for the next year. Assume an income tax rate of 40 percent. Include the following schedules. 1. Sales budget. 2. Production budget. 3. Direct-material budget. 4. Direct-labor budget. 5. Production-overhead budget. 6. Selling and administrative expense budget. 7. Budgeted income statement. (Hint: To determine cost of goods sold, first compute the production cost per unit for each type of box. Include applied production overhead in the cost