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.) Fresh Pak 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 Direct material required per 100 boxes Paperboard (0.36 per pound) Corrugating medium (50.18 per pound) Direct labor required per 100 boxes ($18.00 per hour 25 pounds 25 pounds 0.40 hour 65 pounds 25 pounds 0.00 hour The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 415,000 units for each type of box Production overhead is applied on the basis of direct labor hours Indirect material Indirect labor Utilities Property taxes Inance Deprelation $12.600 89.520 36.000 24.000 19.000 38,000 $219, 120 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 $120,000 25,000 140,000 41,500 6,500 $333,000 The sales forecast for the next year is as follows: Box type C Dox type P Sales Volume 420,000 boxes 420,000 boxes Sales Price $140.00 per hundred boxes 200.00 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 15,000 boxes 25,000 boxes 10,000 boxes 20.000 boxes Tinished goods Box type C Box type P Raw material: Paperboard Corrugating medium 17,500 pounds 7,500 pounds 7,500 pounds 12,500 pounds Prepare a master budget for Fresh Pak Corporation for the next year. Assume an income tax rate of 35 percent. January 1 December 31 Finished goods Box type C Box type P Raw materials Paperboard Corrugating medium 15,000 boxes 25,000 boxes 10,000 boxes 20,000 boxes 17,500 pounds 7,500 pounds 7.500 pounds 12,500 pounds Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 35 percent. Problem 9-42 Part 4 4. Prepare the direct-labor budget for the next year. (Do not round intermediate calculations. Round "Direct labor required per box (hours)" to 4 decimal places.) Box 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
