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 ($0.34 per pound) 50 pounds 90 pounds Corrugating medium ($0.17 per pound) 40 pounds 50 pounds Direct labor required per 100 boxes ($14.00 per hour) 0.35 hour 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 expenses 6,400 Total $ 329,400 The sales forecast for the next year is as follows: Sales Volume Sales Price Box type C 415,000 boxes $ 135.00 per hundred boxes Box type P 415,000 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 January 1 Desired Ending Inventory December 31 Finished goods: Box type C 14,000 boxes 9,000 boxes Box type P 24,000 boxes 19,000 boxes Raw material: Paperboard 17,000 pounds 7,000 pounds Corrugating medium 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.

Q) Prepare the selling and administrative expense budget for the next year.

Q) Prepare the budgeted income statement for the next year. (Do not round intermediate calculations.)