Question

eBook Calculator Direct Materials Purchases Budget Soda is the largest botter of Soda in Western Europe. The company purchases Brand 1 and Brand 2 concentrate from The Soda Company, 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: Brand 1 46,000 two-liter bottles Brand 2 35,000 two-liter bottles In addition, assume that the concentrate costs $65 per pound both Brand 1 and Brand 2 and is used at a rate of 0.2 pound per 100 liters of carbonated water in blending Brand 1 and 0.25 pound per 100 sters 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 twiter bottles cost $0.086 per bottle and carbonated water costs $0.066 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 Soda-Wakefield Plant Direct Materials Purchases Budget For the Month Ending May 31 (assumed data) Concentrate 24hor Bottles Materials required for production Brandi Brand 2 Total materials Direct material price Total direct materials to be purchased Remember to ignore inventory when calculating direct materials to be purchased. First you must calculate the production amount in liters in order to determine the concentrato pounds required for producson.

Answer 1

Soda-Wakefield Plant Direct Materials Purchases Budget For The Month Ending May 31 (assumed data)
	Concentrate	2-Liter Bottles	Carbonated Water
Materials required for production:
Brand 1	184 Ibs [(46,000*2/100)*0.2]	46,000 btls	92,000 ltrs (46,000*2)
Brand 2	175 Ibs [(35,000*2/100)*0.25]	35,000 btls	70,000 ltrs (35,000*2)
Total materials	359 Ibs	81,000 btls	162,000 ltrs
Direct material per unit price	$65	$0.086	$0.066
Total direct material to be purchased	$23,335	$6,966	$10,692