Coca-Cola Enterprises is the largest bottler of Coca-Cola in Western Europe. The company purchases Coke and Sprite
Question:
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 are 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 2016, assuming inventories are ignored, because there are no changes between beginning and ending inventories for concentrate, bottles, and carbonated water.
Step by Step Answer:
Accounting
ISBN: 978-1285743615
26th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac