CAS X water, and then fills the blended beverage into cans or plastic two-liter

Question

CAS X 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 b In addition, assume that the concentrate costs $77 per pound and 0.2 pound per 100 liters of carbonated water in blending Brand 2. Assume that two that two-liter bottles cost $0.07 per bottle and carbonated water costs $0.05 per liter. iters of carbonated water are used for each two-liter bottle of finished product. Assume further Prepare a concentrate, botties, 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). for Soda Direct Materials Purchases Budget

Explanation / Answer

1) Material purchase budget for 2 liters bottles

2 liters bottles required for Brand 1 = 89,000

2 liters bottles required for Brand 2 = 68,000

Total Bottles required = 89,000+68,000 = 157,000

Cost per 2 liter bottle = $0.07 per bottle

Budgeted Purchase cost for bottle = 157,000*$0.07 per bottle = $10,990

2) Material purchase budget for Carbonated water

Carbonated water required for Brand 1 = 89,000 bottles*2 liter per bottle = 178,000 liters

Carbonated water required for Brand 2 = 68,000 bottles*2 liter per bottle = 136,000 liters

Total carbonated water required = 178,000+136,000 = 314,000 liters

Cost per liter of carbonated water = $0.05 per liter

Budgeted purchase cost for carbonated material = 314,000 liters*$0.05 = $15,700

3) Material purchase budget for Concentrate

Concentrate required for Brand 1 = Total liters of carbonated water*(0.15 pound/100 liters)

= 178,000 liters*(0.15/100) = 267 pounds

Concentrate required for Brand 2 = Total liters of carbonated water*(0.20 pound/100 liters)

= 136,000 litres*(0.20/100) = 272 pounds

Total concentrate required = 267 pounds+272 pounds = 539 pounds

Cost per pound of concentrate = $77 per pound

Budgeted Purchase cost for Concentrate = $77 pounds*539 pounds = $41,503

Total Direct Material budget for March 2014 = 2 liter bottles+Carbonated Water+Concentrate

= $10,990+$15,700+$41,503 = $68,193

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