Soda is the largest bottler of Soda in Western Europe. The company purchases Brand 1 and Brand 2 concentrate from The Soda Compa

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3 years ago

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Soda is the largest bottler of Soda in Western Europe. The company purchases Brand 1 and Brand 2 concentrate from The Soda Compa

ny, dilutes and mixes the concentrate with carbonated water, and then fills the blended beverage into cans or plastic two-liter bottles. Assume that the estimated production for Brand 1 and Brand 2 two-liter bottles at the Wakefield, UK, bottling plant is as follows for the month of May:col1 Brand 1 106,000 two-liter bottlescol2 Brand 2 81,000 two-liter bottlesIn addition, assume that the concentrate costs $79 per pound both Brand 1 and Brand 2 and is used at a rate of 0.1 pound per 100 liters of carbonated water in blending Brand 1 and 0.15 pound per 100 liters of carbonated water in blending Brand 2. Assume that two liters of carbonated water are used for each two-liter bottle of finished product. Assume further that two-liter bottles cost $0.08 per bottle and carbonated water costs $0.06 per liter.Prepare a direct materials purchases budget for May, assuming inventories are ignored, because there are no changes between beginning and ending inventories for concentrate, bottles, and carbonated water.

Business

1 answer:

Dmitry [639] · Answer 1 · 2022-09-01T03:00:01+03:00

Answer and explanation:

<em>check the attached file for a well formatted answer</em>

The purchase budget for the month of Mar 2012 is asked. Also there are no changes in beginning and closing inventories. The data given is summarised as below,

Brand 1 Brand 2

Bottle size 2 lit 2 lit

Number of bottles 106000 81000

Concentrate cost $85 per pound

Concentrate used 0.15 lb per 100 lit 0.2 lb per 100 lit

Carbonated water used 2 lit 2 lit

Bottle cost $0.1 per bottle

Carbonated water cost $0.08 per litre

Based on this the budget is filled as below,

CONCENTRATE 2-LITRE BOTTLES CARBONATED WATER

Brand 1 (A)

318 lbs

[=106000*2/100*0.15 lbs]

106000 bottles

212000 litres

[106000 bottles * 2 litres]

Brand 2 (B)

324 lbs

[=81000*2/100*0.2 lbs]

81000 bottles

162000

[81000 bottles * 2 litres]

Total Materials (C=A+B) 642 lbs 187000 bottles 374000 litres

Direct materials unit price (D) $ 85 $ 0.1 $ 0.08

Total direct materials to be purchased (E=C*D) $54570 $18700 $29920