Chapter 9 Financial Planning and Analysis: The Master Budget The following selling and administrative expenses are anticipated for the next year. Salaries and fringe benefits of sales personnel $ 75,000 Advertising ..... 15,000 Management salaries and fringe benefits .. 90,000 Clerical wages and fringe benefits . . .... 26,000 Miscellaneous administrative expenses ........ 4,000 Total $210,000 I 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 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 ... 10,000 boxes 5,000 boxes Box type P . 20,000 boxes 15,000 boxes Raw material: Paperboard . . . .. ..". 15,000 pounds 5,000 pounds Corrugating medium ............*#5454594..4545...........45495.4 454. 5,000 pounds 10,000 poundsBox 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 10,000 boxes 5,000 boxes Box type P 20,000 boxes 15,000 boxes Raw material: Paperboard 15,000 pounds 5,000 pounds Corrugating medium ........ 5,000 pounds 10,000 pounds Required: Prepare a master budget for FreshPak 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.)Problem 9-42 FreshPak Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, Preparation of Master Budget and vegetables. The canned food box (type C) and the perishable food box (type P) have the following (LO 9-3, 9-4, 9-5) material and labor requirements. 1. Total sales revenue: $1,100,000 3. Cost of purchases (paper- Type of Box board): $97,000 5. Total overhead: $148,500 C 7. Predetermined overhead Direct material required per 100 boxes: rate: $40 per hour Paperboard ($.20 per pound) ......... ......... 30 pounds 70 pounds Corrugating medium ($.10 per pound) ....... 20 pounds 30 pounds Ex Direct labor required per 100 boxes ($ 12.00 per hour) 25 hour 50 hour The following production-overhead costs are anticipated for the next year. The predetermined over- head 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. Indirect material $ 10,500 Indirect labor 50,000 Utilities .. 25,000 Property taxes 18,000 16,000 Insurance ..... 29,000 Depreciation ... $148,500 Total