Hardev 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 ($0.34 per pound)Corrugating medium ($0.17 per pound)Direct labor required per 100 boxes ($17.00 per hour)Type of BoxCP30 pounds70 pounds200.40poundshour30 pounds0.80 hourThe following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based ona production volume of 445,000 units for each type of box. Production overhead is applied on the basis of direct-laborhours.Indirect materialIndirect laborUtilitiesProperty taxesInsuranceDepreciationTotal$ 13,50074,44039,00026,00019,00047,000$ 218,940The following selling and administrative expenses are anticipated for the next year.Salaries and fringe benefits of sales personnelAdvertisingManagement salaries and fringe benefitsClerical wages and fringe benefitsMiscellaneous administrative expenses$ 129,000The sales forecast for the next year is as follows:28,000146,00044,5007,100$ 354,600TotalBox type CBox type PSales Volume450,000 boxes450,000 boxesSales Price$ 120.00 per hundred boxes180.00 per hundred boxesThe following inventory information is available for the next year. The unit production costs for eachproduct are expected to be the same this year and next year.Desired Ending InventoryDecember 31Finished goods:Box type CBox type PRaw material:PaperboardCorrugating mediumExpected InventoryJanuary 110,500 boxes20,500 boxes5,500 boxes15,500 boxes13,500 pounds4,500 pounds3,500 pounds9,500 poundsPrepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of40 percent.7. Prepare the budgeted income statement for the next year. (Hint. To determine cost of goods sold, first compute theproduction cost per unit for each type of box. Include applied production overhead in the cost.)Note: Do not round intermediate calculations.Sales revenueLess: Cost of goods soldGross marginSelling and administrative expensesIncome before taxesIncome tax expenseNet income$ 1,350,000354,600

Name: Hardev FreshPak Corporation manufactures two types of cardboard boxes
Uploaded: 2024-03-20T06:33:06.000Z
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Description: Hardev 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 mate

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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 ($0.34 per pound) Corrugating medium ($0.17 per pound) Direct labor required per 100 boxes ($17.00 per hour) Type of Box с P 30 pounds 70 pounds 20 pounds 0.40 hour 30 pounds 0.80 hour The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 445,000 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 $ 13,500 74,440 39,000 26,000 19,000 47,000 $ 218,940 Total 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: Box type C Box type P Sales Volume 450,000 boxes 450,000 boxes $ 129,000 28,000 146,000 44,500 7,100 $ 354,600 Sales Price $ 120.00 per hundred 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. Finished goods: Box type C Box type P Raw material: Paperboard Corrugating medium Expected Inventory January 1 10,500 boxes 20,500 boxes 13,500 pounds 4,500 pounds Desired Ending Inventory December 31 5,500 boxes 15,500 boxes 3,500 pounds 9,500 pounds Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 40 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 Income tax expense Net income $ 1,350,000 354,600