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Required information Skip to question [The following information applies to the questions displayed below.] FreshPak Corporation manufactures two types of cardboard boxes used in shipping
Required information
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[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 ($0.32 per pound) 30 pounds 70 pounds
Corrugating medium ($0.16 per pound) 20 pounds 30 pounds
Direct labor required per 100 boxes ($16.00 per hour) 0.20 hour 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 475,000 units for each type of box. Production overhead is applied on the basis of direct-labor hours.
Indirect material $ 14,400
Indirect labor 64,000
Utilities 48,000
Property taxes 32,000
Insurance 25,000
Depreciation 56,000
Total $ 239,400
The following selling and administrative expenses are anticipated for the next year.
Salaries and fringe benefits of sales personnel $ 138,000
Advertising 31,000
Management salaries and fringe benefits 152,000
Clerical wages and fringe benefits 47,500
Miscellaneous administrative expenses 7,700
Total $ 376,200
The sales forecast for the next year is as follows:
Sales Volume Sales Price
Box type C 480,000 boxes $ 120.00 per hundred boxes
Box type P 480,000 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
Finished goods:
Box type C 16,500 boxes 11,500 boxes
Box type P 26,500 boxes 21,500 boxes
Raw material:
Paperboard 16,500 pounds 6,500 pounds
Corrugating medium 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.
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.)
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