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. 2229 of Box C P Direct material required per 100 boxes: Paperboard ($0.28 per pound) 45 pounds 35 pounds Corrugating medium {$0.14 per pound) 35 pounds 45 pounds Direct labor required per 100 boxes ($16.00 per hour) 0.35 hour 0.?0 hour 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 5 14,850 Indirect labor 16,690 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 $307,000 The sales forecast for the next year is as follows: Sales Volume Sales Price Box type C 495,000 boxes $135.00 per hundred boxes Box type P 495,000 boxes 195.00 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 19,500 boxes 14,500 boxes Box type P 29,500 boxes 24,500 boxes Raw material: Paperboard 10,000 pounds 8,000 pounds Corrugating medium 9,000 pounds 14,000 pounds Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 40 percent. 7. Prepare the budgeted income statement for the next year. {Do not round intermediate calculations.) 9 Answer is complete but not entirely correct. $ 1,633,500 a (595,000) 9 $ 1,038,500 0 387,000 a $ 651,500 9 260,600 0 $ 390,900 6 Sales revenue 0 Less: Cost of goods sold Gross margin 9 Selling and administrative expenses Income before taxes 0 Income tax expense Net income 0