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

C P

Direct material required per $100$ boxes:

Paperboard $($$$0\mathrm{.}32$ per pound$)35$ pounds $75$ pounds

Corrugating medium $($$$0\mathrm{.}16$ per pound$)25$ pounds $35$ pounds

Direct labor required per $100$ boxes $($$$16\mathrm{.}00$ per hour$)0\mathrm{.}20$ hour $0\mathrm{.}40$ hour

The following production$-$overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of $480,000$ units for each type of box. Production overhead is applied on the basis of direct$-$labor hours.

Indirect material $ $14,550$

Indirect labor $81,530$

Utilities $49,500$

Property taxes $33,000$

Insurance $26,000$

Depreciation $57,500$

Total $ $262,080$

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

Salaries and fringe benefits of sales personnel $ $139,500$

Advertising $31,500$

Management salaries and fringe benefits $153,000$

Clerical wages and fringe benefits $48,000$

Miscellaneous administrative expenses $7,800$

Total $ $379,800$

The sales forecast for the next year is as follows:

Sales Volume Sales Price

Box type C $485,000$ boxes $ $125\mathrm{.}00$ per hundred boxes

Box type P $485,000$ boxes $185\mathrm{.}00$ 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 January $1$ Desired Ending Inventory December $31$

Finished goods:

Box type C $17,500$ boxes $12,500$ boxes

Box type P $27,500$ boxes $22,500$ boxes

Raw material:

Paperboard $17,000$ pounds $7,000$ pounds

Corrugating medium $8,000$ pounds $13,000$ 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.$)$