direct materials purchases budget

coca-cola enterprises (cce) is the largest bottler of coca-cola® in western europe. the company purchases coke® and sprite® concentrate from the coca-cola company (ko), 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 inventories are ignored, because there are no changes between beginning and ending inventories for concentrate, bottles, and carbonated water.

coca-cola enterprises-wakefield plant
direct materials purchases budget
for the month ending may 31 (assumed data)

line item description | concentrate | 2-liter bottles | carbonated water
materials required for production:
coke®
sprite®
total materials
direct materials unit price
total direct materials to be purchased

Question

direct materials purchases budget

coca-cola enterprises (cce) is the largest bottler of coca-cola® in western europe. the company purchases coke® and sprite® concentrate from the coca-cola company (ko), 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 inventories are ignored, because there are no changes between beginning and ending inventories for concentrate, bottles, and carbonated water.

coca-cola enterprises-wakefield plant
direct materials purchases budget
for the month ending may 31 (assumed data)

line item description | concentrate | 2-liter bottles | carbonated water
materials required for production:
coke®
sprite®
total materials
direct materials unit price
total direct materials to be purchased

Accepted Answer

{ "quality": "clear", "question_count": 1, "skills_matched": [ "step_cot", "blank_filling_formatter", "explain_then_answer", "quick" ], "needs_drawing": false, "concepts_used": [ "Direct Materials Purchases Budget" ], "new_concepts": [], "current_concepts": [ "Direct Materials Purchases Budget" ] } ## Calculate materials required for production $$ \begin{aligned} &\text{Coke Production} = 153,000 \text{ bottles} \ &\text{Sprite Production} = 86,500 \text{ bottles} \ \ &\text{Carbonated Water Required:} \ &\text{Coke: } 153,000 \times 2 \text{ liters} = 306,000 \text{ liters} \ &\text{Sprite: } 86,500 \times 2 \text{ liters} = 173,000 \text{ liters} \ &\text{Total Carbonated Water} = 306,000 + 173,000 = 479,000 \text{ liters} \ \ &\text{Concentrate Required:} \ &\text{Coke: } 306,000 \text{ liters} \times \frac{0.15 \text{ lbs}}{100 \text{ liters}} = 459 \text{ lbs} \ &\text{Sprite: } 173,000 \text{ liters} \times \frac{0.10 \text{ lbs}}{100 \text{ liters}} = 173 \text{ lbs} \ &\text{Total Concentrate} = 459 + 173 = 632 \text{ lbs} \ \ &\text{2-Liter Bottles Required:} \ &\text{Coke: } 153,000 \text{ bottles} \ &\text{Sprite: } 86,500 \text{ bottles} \ &\text{Total Bottles} = 153,000 + 86,500 = 239,500 \text{ bottles} \end{aligned} $$ ## Determine unit prices $$ \begin{aligned} &\text{Concentrate Unit Price} = \$75 \text{ per pound} \ &\text{2-Liter Bottles Unit Price} = \$0.08 \text{ per bottle} \ &\text{Carbonated Water Unit Price} = \$0.06 \text{ per liter} \end{aligned} $$ ## Calculate total direct materials to be purchased $$ \begin{aligned} &\text{Total Concentrate Cost} = 632 \text{ lbs} \times \$75 = \$47,400 \ &\text{Total Bottles Cost} = 239,500 \text{ bottles} \times \$0.08 = \$19,160 \ &\text{Total Carbonated Water Cost} = 479,000 \text{ liters} \times \$0.06 = \$28,740 \end{aligned} $$ **Coca-Cola Enterprises-Wakefield Plant** **Direct Materials Purchases Budget** **For the Month Ending May 31 (assumed data)** | Line Item Description | Concentrate | 2-Liter Bottles | Carbonated Water | | :--- | :--- | :--- | :--- | | **Materials required for production:** | | | | | Coke® | 459 lbs. | 153,000 btls. | 306,000 ltrs. | | Sprite® | 173 lbs. | 86,500 btls. | 173,000 ltrs. | | **Total materials** | 632 lbs. | 239,500 btls. | 479,000 ltrs. | | Direct materials unit price | $\times$ $75 | $\times$ $0.08 | $\times$ $0.06 | | **Total direct materials to be purchased** | $47,400 | $19,160 | $28,740 | { "subject": "Business", "question_type": "Fill-in-the-blank", "knowledge_point": [ "Business", "Accounting", "Direct Materials Purchases Budget" ] }

Line Item Description	Concentrate	2-Liter Bottles	Carbonated Water
Coke®	<blank>459</blank> lbs.	<blank>153,000</blank> btls.	<blank>306,000</blank> ltrs.
Sprite®	<blank>173</blank> lbs.	<blank>86,500</blank> btls.	<blank>173,000</blank> ltrs.
Total materials	<blank>632</blank> lbs.	<blank>239,500</blank> btls.	<blank>479,000</blank> ltrs.
Direct materials unit price	\(\times\) $<blank>75</blank>	\(\times\) $<blank>0.08</blank>	\(\times\) $<blank>0.06</blank>
Total direct materials to be purchased	$<blank>47,400</blank>	$<blank>19,160</blank>	$<blank>28,740</blank>

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Question

Explanation:

Calculate materials required for production

Determine unit prices

Calculate total direct materials to be purchased

Answer: