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
	C				P
Direct material required per 100 boxes:
Paperboard ($0.32 per pound)		30	pounds			70	pounds
Corrugating medium ($0.16 per pound)		20	pounds			30	pounds
Direct labor required per 100 boxes ($16.00 per hour)		0.20	hour			0.40	hour

 
The following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based on a production volume of 475,000 units for each type of box. Production overhead is applied on the basis of direct-labor hours.
 

Indirect material	$	14,400
Indirect labor		64,000
Utilities		48,000
Property taxes		32,000
Insurance		25,000
Depreciation		56,000
Total	$	239,400

 
The following selling and administrative expenses are anticipated for the next year.
 

Salaries and fringe benefits of sales personnel	$	138,000
Advertising		31,000
Management salaries and fringe benefits		152,000
Clerical wages and fringe benefits		47,500
Miscellaneous administrative expenses		7,700
Total	$	376,200

 
The sales forecast for the next year is as follows:
 

	Sales Volume				Sales Price
Box type C		480,000	boxes		$	120.00	per hundred boxes
Box type P		480,000	boxes			180.00	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 January 1			Desired Ending Inventory December 31
Finished goods:
Box type C	16,500	boxes		11,500	boxes
Box type P	26,500	boxes		21,500	boxes
Raw material:
Paperboard	16,500	pounds		6,500	pounds
Corrugating medium	7,500	pounds		12,500	pounds

 
Prepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 35 percent.

4. Prepare the direct-labor budget for the next year. (Do not round intermediate calculations. Round "Direct labor required per box (hours)" to 4 decimal places.)