FreshPak 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 ($0.34 per pound) Corrugating medium ($0.17 per pound) Direct labor required per 100 boxes ($14.00 per hour) 50 pounds 40 pounds 0.35 hour 90 pounds 50 pounds 0.70 hour The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 410,000 units for each type of box. Production overhead is applied on the basis of direct-labor hours. Indirect material $ 12,450 Indirect labor 82,190 Utilities 34,500 Property taxes 23,000 Insurance 18,000 Depreciation 36,500 Total $206,640 The following selling and administrative expenses are anticipated for the next year. Salaries and fringe benefits of sales personnel $118,500 Advertising 24,500 Management salaries and fringe benefits 139,000 Clerical wages and fringe benefits 41,000 Miscellaneous administrative 6,400 expenses Total $329,400 The sales forecast for the next year is as follows: Sales Price Box type C Sales Volume 415,000 boxes boxes Box $135.00 per hundred 195.00 per hundred 415,000 boxes type P 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. 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 January 1 Desired Ending Inventory December 31 14,000 boxes 24,000 boxes 9,000 boxes 19,000 boxes Finished goods: Box type c Box type P Raw material: Paperboard Corrugating medium 17,000 pounds 7,000 pounds 7,000 pounds 12,000 pounds Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 40 percent Problem 9-42 Part 7 7. Prepare the budgeted income statement for the next year. (Do not round intermediate calculations.) Sales revenue $ 1,369,500 Less: Cost of goods sold Gross margin Selling and administrative expenses Income before taxes (Income tax expense Net income 329,400