Question

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. Problem 9-42 Preparation of Master Budget (LO 9-3, 9-4, 9-5) 1. Total sales revenue: $1.100.000 3. Cost of purchases (paper- board): $97,000 5. Total overhead: $148,500 7. Predetermined overhead rate: $40 per hour Type of Box P Direct material required per 100 boxes: Paperboard ($.20 per pound) ... Corrugating medium ($.10 per pound) .. Direct labor required per 100 boxes ($12.00 per hour) .... ............... 30 pounds 20 pounds .25 hour 70 pounds 30 pounds .50 hour The following production-overhead costs are anticipated for the next year. The predetermined over- head rate is based on a production volume of 495,000 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 $ 10,500 50,000 25,000 18,000 16,000 29,000 $148,500 ....... ............

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