Blue Fish 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:

The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 495,000 units for each type of box. Production overhead is applied on the basis of direct labor hours.

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.

Required

a) prepare a master budget income statement

b) flexible production overhead budget based on the actual sales of Box Type C = 480000 unit sales, Box Type P = 480000 unit sales

c) flexible income statement based on the actual sales of Box Type C = 480000 unit sales, Box Type P = 480000 unit sales

Type of Box Direct material required per 100 boxes Paperboard ($.20 per pound) Corrugating medium ($.10 per pound) Direct labor required per 100 boxes ($12.00 per hour) 25 hour 30 pounds 20 pounds 70 pounds 30 pounds .50 hour Indirect material S 10,500 Indirect labor Utilities Property taxes18,000 Insurance Depreciation Total 50,000 25,000 16,000 29,000 $148,500 The following selling and administrative expenses are anticipated for the next year Salaries and fringe benefits of sales personnel $75,000 Advertising Management salaries and fringe benefits Clerical wages and fringe benefits Miscellaneous administrative expenses Total 15,000 90,000 26,000 4,000 $210,000 The sales forecast for the next year 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 Expected Inventory Desired Ending Inventory January 1 December 31 Finished goods: Box type C Box type P Raw material: Paperboard Corrugating medium 10,000 boxes 20,000 boxes 5,000 boxes 15,000 boxes 15,000 pounds 5,000 pounds 5,000 pounds 10,000 pounds