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7. 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:

7. 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:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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7. 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:

 

 

### Production Data for Wakefield, UK Bottling Plant (May): - **Brand 1:** 64,000 two-liter bottles - **Brand 2:** 49,000 two-liter bottles **Cost Assumptions:** - Concentrate costs $62 per pound. - Concentrate usage: - Brand 1: 0.2 pound per 100 liters of carbonated water. - Brand 2: 0.25 pound per 100 liters of carbonated water. - Two liters of carbonated water per two-liter bottle. - Two-liter bottles cost $0.071 each. - Carbonated water costs $0.051 per liter. **Task:** Prepare a direct materials purchases budget for May. Inventories are ignored, as there are no changes between beginning and ending inventories for concentrate, bottles, and carbonated water. Round dollar amounts to the nearest cent. ### 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 | | | | | Brand 2 | | | | | **Total materials required** |||| | | lbs. | btls. | ltrs. | | **Unit price** | x $62.00 | x $0.071 | x $0.051 | | **Total direct materials to be purchased** |||| Fill in the quantities required for each material and calculate the total cost by multiplying the unit price by the required quantity.
Transcribed Image Text:### Production Data for Wakefield, UK Bottling Plant (May): - **Brand 1:** 64,000 two-liter bottles - **Brand 2:** 49,000 two-liter bottles **Cost Assumptions:** - Concentrate costs $62 per pound. - Concentrate usage: - Brand 1: 0.2 pound per 100 liters of carbonated water. - Brand 2: 0.25 pound per 100 liters of carbonated water. - Two liters of carbonated water per two-liter bottle. - Two-liter bottles cost $0.071 each. - Carbonated water costs $0.051 per liter. **Task:** Prepare a direct materials purchases budget for May. Inventories are ignored, as there are no changes between beginning and ending inventories for concentrate, bottles, and carbonated water. Round dollar amounts to the nearest cent. ### 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 | | | | | Brand 2 | | | | | **Total materials required** |||| | | lbs. | btls. | ltrs. | | **Unit price** | x $62.00 | x $0.071 | x $0.051 | | **Total direct materials to be purchased** |||| Fill in the quantities required for each material and calculate the total cost by multiplying the unit price by the required quantity.
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