Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Edgeworth Box Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables. The canned food box (type C) and the

Edgeworth Box 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
C P
Direct material required per 100 boxes:
Corrugating medium ($0.14 per pound) 35 pounds 45 pounds
Paperboard ($0.28 per pound) 45 pounds 85 pounds
Direct labor required per 100 boxes ($16.00 per hour) 0.35 hour 0.70 hour

The unit production costs for each product are expected to be the same this year and next year.

The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 490,000 units for each type of box. Production overhead is applied on the basis of direct-labor hours.

Indirect material $ 14,850
Indirect labor 76,690
Utilities 52,500
Property taxes 35,000
Insurance 28,000
Depreciation 60,500
Total $ 267,540

The following selling and administrative expenses are anticipated for the next year.

Salaries and fringe benefits of sales personnel $ 142,500
Advertising 32,500
Management salaries and fringe benefits 155,000
Clerical wages and fringe benefits 49,000
Miscellaneous administrative expenses 8,000
Total $ 387,000

The sales forecast for the next year is as follows:

Sales Volume Sales Price
Box type C 495,000 boxes $ 135 per hundred boxes
Box type P 495,000 boxes 195 per hundred boxes

The following inventory information is available for the next year.

Expected Inventory January 1 Desired Ending Inventory December 31
Finished goods:
Box type C 19,500 boxes 14,500 boxes
Box type P 29,500 boxes 24,500 boxes
Raw material:
Corrugating medium 9,000 pounds 14,000 pounds
Paperboard 18,000 pounds 8,000 pounds

Prepare a master budget for Edgeworth Box Corporation for the next year. Assume an income tax rate of 40 percent. Include the following schedules.

Calculate a, b, c, and d. Assume an income tax rate of 40 percent.

Sales Revenue $1,633,500
Less: Cost of Goods Sold a
Gross Margin b
Selling and administrative expenses 387,000
Income before taxes c
Income Tax expense d
e

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Textbook Of Accounting For Management

Authors: S.N. Maheshwari

3rd Edition

9325956195, 978-9325956193

More Books

Students also viewed these Accounting questions

Question

What is the difference between risk aversion and loss aversion?

Answered: 1 week ago

Question

please dont use chat gpt 2 9 4 . .

Answered: 1 week ago

Question

5. Explain how to conduct an appraisal feedback interview.

Answered: 1 week ago

Question

2. Answer the question, Who should do the appraising?

Answered: 1 week ago