Direct Materials Purchases Budget Soda Company is the largest bottler 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 are as follows for the month of May: Brand 1 70,000 two-liter bottles Brand 2 53,000 two-liter bottles In addition, assume that the concentrate costs $73 per pound for 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 $0.095 per bottle and carbonated water costs $0.075 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. If required, round to the nearest whole number (except for unit price amounts, which should be rounded to nearest cent if required). Soda Company-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 fill in the blank 1lbs. fill in the blank 2btls. fill in the blank 3ltrs. Brand 2 fill in the blank 4 fill in the blank 5 fill in the blank 6 Total materials required fill in the blank 7lbs. fill in the blank 8btls. fill in the blank 9ltrs. Unit price x $fill in the blank 10 x $fill in the blank 11 x $fill in the blank 12 Total direct materials to be purchased $fill in the blank 13 $fill in the blank 14 $fill in the blank 15

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 10E

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Direct Materials Purchases Budget

Soda Company is the largest bottler 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 are as follows for the month of May:

Brand 1	70,000 two-liter bottles
Brand 2	53,000 two-liter bottles

In addition, assume that the concentrate costs $73 per pound for 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 $0.095 per bottle and carbonated water costs $0.075 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. If required, round to the nearest whole number (except for unit price amounts, which should be rounded to nearest cent if required).

Soda Company-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	fill in the blank 1lbs.	fill in the blank 2btls.	fill in the blank 3ltrs.
Brand 2	fill in the blank 4	fill in the blank 5	fill in the blank 6
Total materials required	fill in the blank 7lbs.	fill in the blank 8btls.	fill in the blank 9ltrs.
Unit price	x $fill in the blank 10	x $fill in the blank 11	x $fill in the blank 12
Total direct materials to be purchased	$fill in the blank 13	$fill in the blank 14	$fill in the blank 15

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