PR $9-42($Algo$)$ Preparation of Master Budget $($LO $9-3,9-4,9-5)$Skip to question$[$The following information applies to the questions displayed below.$]$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 BoxCPDirect material required per $100$ boxes: Paperboard $($$$0\mathrm{.}40$ per pound$)35$pounds$75$poundsCorrugating medium $($$$0\mathrm{.}20$ per pound$)25$pounds$35$poundsDirect labor required per $100$ boxes $($$$20\mathrm{.}00$ per hour$)0\mathrm{.}20$hour$0\mathrm{.}40$hourThe following production$-$overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of $425,000$ units for each type of box. Production overhead is applied on the basis of direct$-$labor hours.Indirect material$ $12,900$Indirect labor$54,600$Utilities$33,000$Property taxes$22,000$Insurance$15,000$Depreciation$41,000$Total$ $178,500$The following selling and administrative expenses are anticipated for the next year.Salaries and fringe benefits of sales personnel$ $123,000$Advertising$26,000$Management salaries and fringe benefits$142,000$Clerical wages and fringe benefits$42,500$Miscellaneous administrative expenses$6,700$Total$ $340,200$The sales forecast for the next year is as follows: Sales VolumeSales PriceBox type C$430,000$boxes$ $115\mathrm{.}00$per hundred boxesBox type P$430,000$boxes$175\mathrm{.}00$per hundred boxesThe 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$17,000$boxes$12,000$boxesBox type P$27,000$boxes$22,000$boxesRaw material: Paperboard$18,500$pounds$8,500$poundsCorrugating medium$8,500$pounds$13,500$poundsPrepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of $30$ percent.PR $9-42($Algo$)$ Part $7$: Prepare the budgeted income statement for the next year$\mathrm{.}7.$ Prepare the budgeted income statement for the next year. $($Hint: To determine cost of goods sold, first compute the production cost per unit for each type of box. Include applied production overhead in the cost.$)$Note: Do not round intermediate calculations.