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 P Direct material required per 100 boxes Paperboard (50.36 per pound) Corrugating medium ($0.15 per pound) Direct labor required per 100 boxes ($18.00 per hour) 40 pounds 30 pounds 0.25 hour 30 pounds 40 pounds 8.50 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 95,850 31,500 21.000 16,000 33,500 $210.000 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 5322,200 The sales forecast for the next year is as follows: Sales Volume Sales Price Box type C 405,000 boxes $125,00 per hundred boxes Box type P 405,000 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 Ending Inventory Required information Expected Inventory January 1 Desired Ending Inventory December 31 Finished goods: Box type C Box type P Raw material: Paperboard Corrugating medium 12,000 boxes 22,000 boxes 7,600 boxes 17,000 boxes 16,000 pounds 6.000 pounds 6,000 pounds 11,000 pounds Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 40 percent. Problem 9.42 Part 3 3-a. Prepare the direct-material budget for paperboard. 3-b. Prepare the direct-material budget for corrugating medium. Complete this question by entering your answers in the tabs below. Req Reg 3B Prepare the direct-material budget for paperboard. Box P Total 0.80 X X Paporboard Box C Production requirement (number of boxes) X Raw material required per box (pounds) 0.40 Raw material required for production (pounds) Add: Desired ending raw-material inventory Total raw material needs Loss: Beginning raw.material inventory Raw material to be purchased Price (per pound) Cost of purchases (paperboard) 6.000 X S 0.30 Req3A Req3B) Expected Inventory January 1 Desired Ending Inventory December 31 12,000 boxes 22,000 boxes 7,000 boxes 17,000 boxes Finished goods: Box type C Box type P Raw material: Paperboard Corrugating medium 16,000 pounds 6,000 pounds 6,000 pounds 11,000 pounds Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 40 percent. Problem 9-42 Part 3 3-8. Prepare the direct-material budget for paperboard. 3-b. Prepare the direct material budget for corrugating medium Complete this question by entering your answers in the tabs below. Req Reg 38 Box P Total 0.40 x Prepare the direct-material budget for corrugating medium. Corrugating Medium Box C Production requirements (number of boxes) Raw material required per box (pounds) 0.30 Raw material required for production (pounds) Add: Desired ending raw-material inventory Total raw material needs Less: Beginning raw material inventory Raw material to be purchased Price (per pound) Cost of purchases (corrugating medium) X 11,000 0.15