# Direct materials purchases budget Coca-Cola Enterprises is the largest bottler of Coca-Cola ® in Western Europe. The company purchases Coke and Sprite ® concentrate from The Coca-Cola 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 Coke and Sprite two-liter bottles at the Wakefield, UK, bottling plant is as follows for the month of May: Coke 153,000 two-liter bottles Sprite 86,500 two-liter bottles In addition, assume that the concentrate costs $75 per pound for both Coke and Sprite and is used at a rate of 0.15 pound per 100 liters of carbonated water in blending Coke and 0.10 pound per 100 liters of carbonated water in blending Sprite. 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 that inventories are ignored, because there are no changes between (beginning and ending inventories for concentrate, bottles, and carbonated water. BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 #### Solutions Chapter Section Chapter 22, Problem 22.10EX Textbook Problem ## Direct materials purchases budgetCoca-Cola Enterprises is the largest bottler of Coca-Cola® in Western Europe. The company purchases Coke and Sprite® concentrate from The Coca-Cola 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 Coke and Sprite two-liter bottles at the Wakefield, UK, bottling plant is as follows for the month of May: Coke 153,000 two-liter bottles Sprite 86,500 two-liter bottles In addition, assume that the concentrate costs$75 per pound for both Coke and Sprite and is used at a rate of 0.15 pound per 100 liters of carbonated water in blending Coke and 0.10 pound per 100 liters of carbonated water in blending Sprite. 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 that inventories are ignored, because there are no changes between (beginning and ending inventories for concentrate, bottles, and carbonated water.

Expert Solution
To determine

Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.

Production Budget shows the quantities of units that a company must produce to meet the budgeted sales and inventory.

To Prepare: The September’s direct materials purchases budget for Incorporation L.

### Explanation of Solution

The following table shows theSeptember’s direct materials purchases budget.

 Enterprises C Direct Materials Purchases Budget For The Month Ending May 31 Particulars Concentrate 2-Liter Bottles Carbonated Water (Liters) (A) 2 × (A) Materials Required For Production Koke 459(1) 153,000 306,000 Spride 173(2) 86,500 173,000 Total Materials Required(B) 632 239,500 479,000 Unit Price(C) $75$0.08 $0.06 Total (B) × (C)$47,400 $19,160$28,740 Total Direct Materials To Be Purchased \$95,300

Table (1)

Working Notes:

Calculate the direct material for Koke...

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