Required information [The following information applies to the questions display
ID: 2408729 • Letter: R
Question
Required information
[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.
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.
The following selling and administrative expenses are anticipated for the next year.
The sales forecast for the next year is as follows:
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.
Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 30 percent.
Prepare the budgeted income statement for the next year. (Do not round intermediate calculations.)
Prepare the budgeted income statement for the next year. (Do not round intermediate calculations.)
Type of Box C P Direct material required per 100 boxes: Paperboard ($0.40 per pound) 35 pounds 75 pounds Corrugating medium ($0.20 per pound) 25 pounds 35 pounds Direct labor required per 100 boxes ($20.00 per hour) 0.20 hour 0.40 hourExplanation / Answer
Sales Budget Box Type C Box Type P Total Budgeted Unit Sales 430000 430000 Selling price per 100 units 115 175 Budgeted Sales 494500 752500 1247000 Production budget Box Type C Box Type P Budgeted Unit Sales 430000 430000 Plus: Ending inventory 12000 22000 Total Units Needed 442000 452000 Less: Beginning Inventory 17000 27000 Budgeted Production units 425000 425000 Raw Material Budget Box Type C Box Type P Total Budgeted Production units A 425000 425000 1. Paper Board Pounds per 100 boxes B 35 75 Needed for production (pounds) - A X B C 148750 318750 467500 Plus : Ending inventory (pounds) D 8500 Total paper board needed (pounds) - C+ D E 476000 Less: Beginning Inventory F 18500 Paper borad purchases (pounds) - E - F G 457500 Price per pound H $0.40 Budgeted Purchase of paper board - G X H I 183000 Budgeted Cost of paper board used (C x H) J 59500 127500 187000 2. Corrugated Mediuum Pounds per 100 boxes K 25 35 Needed for production (pounds) - A x K L 106250 148750 255000 Plus : Ending inventory (pounds) M 13500 Total paer board needed (pounds) - L + M N 268500 Less: Beginning Inventory O 8500 Corrugated medium purchases (pounds) - N - O P 260000 Price per pound Q $0.20 Budgeted Purchase of corrugated medium - P x Q R 52000 Budgeted Cost of corrugated medium used (L x Q) S 21250 29750 51000 Total direct material purchases - I + R 235000 Total direct material Consumption - J+S 80750 157250 238000 Direct labor budget Box Type C Box Type P Total Budgeted Production units A 425000 425000 Direct labor hours per 100 boxes B 0.2 0.4 Total direct labor hours needed - A x B C 850 1700 2550 Direct Labor per hour D $20.00 Budgeted direct labor cost - C x D E 17000 34000 51000 Box Type C Box Type P Total Total Production Overhead 178500 Estimated Production 425000 425000 Direct labor hours per unit 0.2 0.4 Estimated total direct labor hours 85000 170000 255000 predeterimned overhead rate per hour 0.70 Budgeted production overhead 59500 119000 Product cost Box Type C Box Type P Total Direct material 80750 157250 238000 Direct labor 17000 34000 51000 Production overhead 59500 119000 178500 Total cost of production 157250 310250 467500 Production units 425000 425000 Cost per unit $0.37 $0.73 Sales units 430000 430000 Cost of goods sold 159100 313900 473000 FRESH PAK CORPORATION Budgeted Income statement sales 1247000 Cost of goods sold 473000 Gross Profit 774000 Selling and administrative expenses: Salaries and benefits of sales personnel 123000 Advertising expense 26000 Management salaries and fringe benefits 142000 Clerical wages and fringebenefits 42500 Miscellaneous administrative expenses 6700 Total selling and administrative expenses 340200 Income before income taxes 433800 Income Tax (30%) 130140 Net Income 303660
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.