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. Type of Box P Direct material required per 100 boxes: Paperboard ($0.28 per pound) Corrugating medium ($0.14 per pound) Direct labor required per 100 boxes ($15.00 per hour) 25 pounds 15 pounds 0.40 hour 65 pounds 25 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 470,000 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 $ 14,250 60,990 46,500 31,000 24,000 54,500 $231,240 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 $136,500 30,500 151,000 47,000 7,600 $372,600 The sales forecast for the next year is as follows: Sales Volume 475,000 boxes Box type с Box type P Sales Price $145.00 per hundred boxes 205.00 per hundred boxes 475,000 boxes

Answer 1

Box-P Total reauired for production strumati tong stot solution De won MOT (4) Preparation of direct labour budget for the next your BOX-C Roduction requirements 4,40,000 4.40,000 to Chumber of boxes) 0.009 Direct labour hour reauised o.cou Per box (hours) 0.40 Presturinto months 100 Direct labour hour 1830 3,760 5,640 0.80 100 Chours) - on Direct taboul rate 2 15 Total Direct Labour cast OBO ho 84,600 ( 20 x2 ③ Belaration of Production overhead Budget Particulars Indirect material Indirect labour utilities $ 46.500 Property taves $ 31,000 insurance will into bio $ 24,000 Depreciation 54,500 Budgerd Poduction auer head> $2,31,240 2t Amount $ 14,850 $ 60,990

① Preparation af selling and administrative exfence budget for the next year an Amount) US salonies and fringe benefits Of Sale $136.500 Personnelles -X Advertising $ 30,500 COCO management salaries and fringe $ 1,51,000 benefits osas ryth Co and oto clerical wages and fringe benefits & ut,000 miscellaneous administratie 0,8 7,600 expense OS Total selling and administrice $ 3.79.600 expense # Preparation of the budgeted income statement for the next year cara 4 Amount ($) sales revenue and with $16.62.50 4,75,000 xaos 475,000 x 145 t 100 100 bidea 94 Less cost of goods sold COZ (working wok-1) $ 4,65,500 Gross Propit u$ 11.97.000 Lesst selling and administratice Ty 3. 42.600 062 expenses 8824.400 $ 3.24.760 not income 4.94,640 auto Income befare faves LESS tou @ 10%

it working note: I computation of cost of goods sold Particulars BOX-C Box - P Total Direct materials Paper board 18.2 (95x0.28) (65x0.98) conugating medium 2.1 3.5 (isxo.1u); (@sxo.14) Direct labour cost 12 0.40x15) Co.goxls) overhead applied predetermined Overhead 16.4 32.8 co 2,3), quo = 41 66.5 5,640 (0.40 X U1), (0.90x41) Total cost Per 100 bones 31.5 sales volume 4.75,000 uitsiooo cost of goods sold $ 1,49,625 3,15875 $4,65,500
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