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 ($0.28 per pound) Corrugating medium ($0.14 per pound) Direct labor required per 100 boxes ($16.00 per hour) Type of Box C 45 pounds 35 pounds 8.35 hour 85 pounds 45 pounds 0.70 hour
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 ($0.28 per pound) Corrugating medium ($0.14 per pound) Direct labor required per 100 boxes ($16.00 per hour) Type of Box C 45 pounds 35 pounds 8.35 hour 85 pounds 45 pounds 0.70 hour
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Variance Analysis
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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![Required information
PR 9-42 (Algo) Preparation of Master Budget (LO 9-3, 9-4, 9-5)
[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.
Direct material required per 100 boxes:
Paperboard ($0.28 per pound)
Corrugating medium (S0.14 per pound)
Direct labor required per 100 boxes ($16.00 per hour)
Type of Box
45 pounds
85 pounds
35 pounds
0.35 hour
45 pounds
0.70 hour
The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on
a production volume of 490,000 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
$ 14,850
76,690
52,500
35,000
28,000
60,500
$267,540
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
$142,500
32,500
155,000
49,000
8,000
$387,000
Sales Price
Sales Volume
495,000 boxes
495,000 boxes
$135.00 per hundred boxes
195.00 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 Desired Ending Inventory
Finished goods:
Box type C
Box type P
Raw material:
Paperboard
Corrugating medium
January 1
December 31
19,500 boxes
14,500 boxes
29,500 boxes
24,500 boxes
18,000 pounds
8,000 pounds
9,000 pounds
14,000 pounds
Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 40 percent.
PR 9-42 (Algo) Part 3: Prepare the direct-material budget...
3-a. Prepare the direct-material budget for paperboard.
3-b. Prepare the direct-material budget for corrugating medium.
Complete this question by entering your answers in the tabs below.
Req ЗА
Req 38
Prepare the direct-material budget for paperboard.
Production requirement (number of boxes)
Raw material required per box (pounds)
Raw material required for production (pounds)
Total raw-material needs
Paperboard
Box C
Box P
Total
Raw material to be purchased
Price (per pound)
Cost of purchases (paperboard)
Req 3A
Req 3B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F23603c1a-b91a-4320-9fcc-6884c096e571%2F66fc61e0-ef00-468d-8b1b-41380c8e3869%2Fzu5mtp_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
PR 9-42 (Algo) Preparation of Master Budget (LO 9-3, 9-4, 9-5)
[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.
Direct material required per 100 boxes:
Paperboard ($0.28 per pound)
Corrugating medium (S0.14 per pound)
Direct labor required per 100 boxes ($16.00 per hour)
Type of Box
45 pounds
85 pounds
35 pounds
0.35 hour
45 pounds
0.70 hour
The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on
a production volume of 490,000 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
$ 14,850
76,690
52,500
35,000
28,000
60,500
$267,540
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
$142,500
32,500
155,000
49,000
8,000
$387,000
Sales Price
Sales Volume
495,000 boxes
495,000 boxes
$135.00 per hundred boxes
195.00 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 Desired Ending Inventory
Finished goods:
Box type C
Box type P
Raw material:
Paperboard
Corrugating medium
January 1
December 31
19,500 boxes
14,500 boxes
29,500 boxes
24,500 boxes
18,000 pounds
8,000 pounds
9,000 pounds
14,000 pounds
Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 40 percent.
PR 9-42 (Algo) Part 3: Prepare the direct-material budget...
3-a. Prepare the direct-material budget for paperboard.
3-b. Prepare the direct-material budget for corrugating medium.
Complete this question by entering your answers in the tabs below.
Req ЗА
Req 38
Prepare the direct-material budget for paperboard.
Production requirement (number of boxes)
Raw material required per box (pounds)
Raw material required for production (pounds)
Total raw-material needs
Paperboard
Box C
Box P
Total
Raw material to be purchased
Price (per pound)
Cost of purchases (paperboard)
Req 3A
Req 3B >
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