of 7 ok 0 nces 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 ($0.14 per pound) Direct labor required per 100 boxes ($16.00 per hour) Type of Box 45 pounds 35 pounds 0.35 hour 85 pounds 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 Sales Volume 495,000 boxes 495,000 boxes $ 142,500 32,500 155,000 49,000 8,000 $387,000 Sales Price $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 9,000 pounds 8,000 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 6: Prepare the selling and administrative expense budget for the next year. 6. Prepare the selling and administrative expense budget for the next year.