Question

canned food, fnuit, and vegetables. The canned food box (type C) and the perishable food box (type P) have te material and labor requirements. FreshPak Corporation manufactures two types of cardboard boxes used in shipping Type of Box Direct material required per 100 boxes: 30pounds 70pounds Paperboard ($.20 per pound) Corrugating medium ($ 10 per pound) 20 pounds 30 25 hour 50 hou Direct labor required per 100 boxes ($12.00 per 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. $10,500 Indirect labor Utilities Property taxes Insurance Depreciation otal 50,000 25,000 18,000 6,000 29,000 .. $148,500

Answer 1

	FreshPak Corporation
Requirement 1
	Sales Budget
	Particuler	Box C	Box P	Total
	Units	500000	500000
	Selling Price in	0.9	1.3
	Total Sales Revene	450000	650000	1100000
Requirement 2
	Manufacturing Budget
		Box C	Box P
	Closing Inventory Desired	5000	15000
	Units to be sold	500000	500000
	Units available for sale	505000	515000
	Beginning Inventory estimated	10000	20000
	Units to be Manufactured	495000	495000
Requirement 3
	Raw Materials budget	Box C	Box P	Total	Ending Inventory	Raw material needed	Beginning Inventory	Raw materials to be purchased in pound	Purchase price per pound	Total purchase value
	Units to be manufactured	495000	495000
		(in Pounds)
	Paperboard	148500	346500	495000	5000	500000	15000	485000	0.2	97000
	Corrugating Medium	99000	148500	247500	10000	257500	5000	252500	0.1	25250
									Total	122250
Requirement 4
	Direct Labor budget	Box C	Box P	Total
	Units to be Manufactured	495000	495000
	Direct labor required per 100 boxes	0.25	0.5	hours
	Direct labor hours required	1237.5	2475
	Direct labor rate per hour	12	12
	Total direct labor	14850	29700	44550
Requirement 5
	Overhead budget	Box C	Box P	Total
	Production volume	495000	495000
	Direct labor per 100 boxes	0.25	0.5
	Labor hours required	1237.5	2475	3712.5
	Total expected production overhead	49500	99000	148500
	Production overhead per 100 boxes	10	20
Requirement 6
	Selling & adminstrative expenses budget
	Salaries and fringe benefits of sales personnel	75000
	Advertising	15000
	Management salaries and fringe benefits	90000
	Clerical wages and fringe benefits	26000
	Miscellaneous administrative expenses	4000
	Total	210000
Requirement 7
	Budgeted Income statement
	Sales		1100000
	Less : Cost of goods sold
	Direct Material consumed	122250
	Direct Labor	44550
	Overhead	148500
	Total cost of goods sold		315300
	Selling & adminstrative expenses		210000
	Income before taxes		105300
	Income tax expense	@40%	42120
	Net Income		63180