Problem 9-42 Preparation of Master Budget (LO 9-3, 9-4, 9-5) [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 Box C Direct material required per 100 boxes: Paperboard ($0.30 per pound) Corrugating medium ($0.15 per pound) Direct labor required per 100 boxes ($18.00 per hour) 40 pounds 30 pounds @.25 hour se pounds 40 pounds 0.50 hour The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 400,000 units for each type of box Production overhead is applied on the basis of direct-labor hours, Indirect material Indirect labor Utilities Property taxes Insurance Depreciation Total $ 12,150 95,85 31,5ee 21, eee 16,000 33,500 $210,000 The following selling and administrative expenses are anticipated for the next year. The following selling and administrative expenses are anticipated for the next year. Salaries and fringe benefits of sales personnel Advertising Management salaries and fringe benefits Clerical wages and fringe benefits Miscellaneous administrative expenses Total $115,500 23,500 137,000 40,000 6,200 $322, 200 The sales forecast for the next year is as follows: Box type Box type P Sales Volume 485, eee boxes 405,eee boxes Sales Price $125.00 per hundred boxes 185.00 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 Eriding Inventory January 1 December 31 Finished goods Box type 12,000 boxes 7, eee boxes Box type P 22,000 boxes 17. eee boxes Raw material: Paperboard 16,eee pounds 6,000 pounds Corrugating medium 6,880 pounds 11, eee pounds Problem 9-42 Part 1 Required: 1. Prepare the sales budget for the next year. (Round "Sales price per unit" to 2 decimal places.) Boxc Box P Total Sales (in units) Sales price per unit Sales revenue $ 0 $ 0 $ 0 Problem 9-42 Part 2 2. Prepare the production budget for the next year. Box C Box P Sales Total units needed Production requirements Required information Req 3A Req 3B Prepare the direct-material budget for paperboard. Box P Total Paperboard Box C Production requirement (number of boxes) Raw material required per box (pounds) 0.40 Raw material required for production (pounds) 0.80 Total raw material needs 6,000 Raw material to be purchased Price (per pound) Cost of purchases (paperboard) $ 0.30 Reg Req3B > Req 3A Req 3B Prepare the direct-material budget for corrugating medium. Box P Total Corrugating Medium Box C Production requirements (number of boxes) Raw material required per box (pounds) 0.30 Raw material required for production (pounds) 0.40 11,000 Total raw material needs Raw material to be purchased Price (per pound) Cost of purchases (corrugating medium) 0.15 Problem 9-42 Part 4 4. Prepare the direct-labor budget for the next year. (Do not round irftermediate calculations. Round "Direct labor required per box (hours)" to 4 decimal places.) Box C Box P Total Production requirements (number of boxes) Direct labor required per box (hours) Direct labor required for production (hours) Direct-labor rate Total direct-labor cost 5. Prepare the production-overhead budget for the next year. s Total production overhead 6. Prepare the selling and administrative expense budget for the next year. Total selling and administrative expenses Problem 9-42 Part 7 7. Prepare the budgeted income statement for the next year. (Do not round intermediate calculations.)
