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.

The following manufacturing-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 495,000 units for each type of box. Manufacturing overhead is applied on the basis of direct-labor hours.

 

Indirect material .....................................................................	$10,500
Indirect labor ..........................................................................	50,000
Utilities ..................................................................................	25,000
Property taxes ........................................................................	18,000
Insurance ................................................................................	16,000
Depreciation ..........................................................................	29,000
Total .....................................................................................	$148,500

The following selling and administrative expenses are anticipated for the next year.

 

Salaries and fringe benefits of sales personnel ......................................	$75,000
Advertising ............................................................................................	15,000
Management salaries and fringe benefits ..............................................	90,000
Clerical wages and fringe benefits ........................................................	26,000
Miscellaneous administrative expenses ................................................	4,000
Total .......................................................................................................	$210,000

The sales forecast for the next year is as follows:

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.

Required:
Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 40 percent. Include the following schedules.
1. Sales budget.
2. Production budget.
3. Direct-material budget.
4. Direct-labor budget.
5. Manufacturing-overhead budget.
6. Selling and administrative expense budget.
7. Budgeted income statement.

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Type of Box Direct material required per 100 boxes: Paperboard $.20 per pound) Corrugating medium ($.10 per pound) 30pounds 20 pounds .25 hour 70pounds 30 pounds ,50 hour Direct labor required per 100 boxes ($12.00 per hour) Box type C.. Bax type P Sales Volume 500,000 boxes 500,000 boxes Sales Price 90.00 per hundred boxes 130.00 per hundred boxes Expected Inventory January 1 Desired Ending Inventory December 31 Finished goods: Box type C. Box type P Raw material: Paperboard 10,000 boxes 20,000 bokes 5,000 boxes 15,000 boxes 15,000 pounds 5,000 pounds 5,000 pounds 10,000 pounds Corrugating medium