FreshPak Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables....

  

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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. Direct material required per 100 boxes: Paperboard ($0.40 per pound) Corrugating medium ($0.20 per pound) Direct labor required per 100 boxes ($20.00 per hour) Type of Box 35 pounds 75 pounds 25 pounds 0.20 hour 35 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 425,000 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 $ 12,900 54,600 33,000 22,000 15,000 41,000 $ 178,500 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 The sales forecast for the next year is as follows: $ 123,000 26,000 142,000 42,500 6,700 $ 340,200 Box type C Box type P Sales Volume 430,000 boxes $ 115.00 430,000 boxes Sales Price 175.00 per hundred boxes 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 Finished goods: Box type C Box type P Raw material: Paperboard Corrugating medium January 1 December 31 17,000 boxes 27,000 boxes 12,000 boxes 22,000 boxes 18,500 pounds 8,500 pounds 8,500 pounds 13,500 pounds Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 30 percent. 7. Prepare the budgeted income statement for the next year. (Hint. To determine cost of goods sold, first compute the production cost per unit for each type of box. Include applied production overhead in the cost.) Note: Do not round intermediate calculations. Sales revenue Less: Cost of goods sold Gross margin Selling and administrative expenses Income before taxes $ 1,247,000 340,200 Income tax expense Net income 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. Direct material required per 100 boxes: Paperboard ($0.40 per pound) Corrugating medium ($0.20 per pound) Direct labor required per 100 boxes ($20.00 per hour) Type of Box 35 pounds 75 pounds 25 pounds 0.20 hour 35 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 425,000 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 $ 12,900 54,600 33,000 22,000 15,000 41,000 $ 178,500 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 The sales forecast for the next year is as follows: $ 123,000 26,000 142,000 42,500 6,700 $ 340,200 Box type C Box type P Sales Volume 430,000 boxes $ 115.00 430,000 boxes Sales Price 175.00 per hundred boxes 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 Finished goods: Box type C Box type P Raw material: Paperboard Corrugating medium January 1 December 31 17,000 boxes 27,000 boxes 12,000 boxes 22,000 boxes 18,500 pounds 8,500 pounds 8,500 pounds 13,500 pounds Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 30 percent. 7. Prepare the budgeted income statement for the next year. (Hint. To determine cost of goods sold, first compute the production cost per unit for each type of box. Include applied production overhead in the cost.) Note: Do not round intermediate calculations. Sales revenue Less: Cost of goods sold Gross margin Selling and administrative expenses Income before taxes $ 1,247,000 340,200 Income tax expense Net income