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Problem 9-42 Preparation of Master Budget (LO 9-3, 9-4, 9-5)

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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.

Problem 9-42 Part 1

Required: 1a. Prepare the sales budget for the next year. (Round "Sales price per unit" to 2 decimal places.)

1b. Prepare the production budget for the next year.

1c. Prepare the direct-material budget for paperboard.

1d. Prepare the direct-material budget for corrugating medium.

1e. Prepare the direct-labor budget for the next year.

1f. Prepare the production-overhead budget for the next year.

1g. Prepare the selling and administrative expense budget for the next year.

1h. Prepare the budgeted income statement for the next year.

The boxes below are the format the answers are asking to be put in. They are in order 1a-1h. Thank you so much. There are similar questions on here but not this one and seeing It worked out would be very helpful. Thank you accounting people!

Box C Box P Total Sales (in units) Sales price per unit Sales revenue $ 0 $ 0 $ 0 Box C Box P Sales Total units needed Production requirements Prepare the direct-material budget for paperboard. Paperboard Box C Box P Total Production requirement (number of boxes) Raw material required per box (pounds) Raw material required for production (pounds) 0.30 0.70 6,500 Total raw-material needs Raw material to be purchased Price (per pound) Cost of purchases (paperboard) $ 0.32 Prepare the direct-material budget for corrugating medium. Box P Total Corrugating Medium Box C Production requirements (number of boxes) Raw material required per box (pounds) 0.20 Raw material required for production (pounds) 0.30 12,500 Total raw-material needs Raw material to be purchased Price (per pound) Cost of purchases (corrugating medium) $ 0.16 Box C 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 Total production overhead $ 0 Total selling and administrative expenses $ 0

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