Required information 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 P Direct material required per 100 boxes: Paperboard ($0.28 per pound) Corrugating medium ($0.14 per pound) Direct labor required per 100 boxes ($14.00 per hour) 40 pounds 30 pounds 0.20 hour 80 pounds 40 pounds 0.40 hour The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 430,000 units for each type of box. Production overhead is applied on the basis of direct-labor hours. Indirect material Indirect labor Utilities Property taxes urance Depreciation Total $ 13,050 56,710 34,500 23,000 16,000 42,500 $185,760 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 $124,500 26,500 143,000 43,000 6,800 $343,800 The sales forecast for the next year is as follows: Box type c Box type P Sales Volume 435,000 boxes 435,000 boxes Sales Price $120.00 per hundred boxes 180.00 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 18,000 boxes 28,000 boxes Finished goods: Box type C Box type P Raw material: Paperboard Corrugating medium 13,000 boxes 23,000 boxes 19,000 pounds 9,000 pounds 9,000 pounds 14,000 pounds Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 30 percent. Problem 9-42 Part 6 6. Prepare the selling and administrative expense budget for the next year. Tat colline and administratie 0 Advertising Clerical wages and fringe benefits Insurance Management salaries and fringe benefits Miscellaneous administrative expenses Salaries and fringe benefits of sales personnel Problem 9-42 Part 7 7. Prepare the budgeted income statement for the next year. (Do not round intermediate calculations.) Income before taxes Income tax expense Sales revenue Selling and administrative expenses