Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Darley Beverages manufactures its own soda pop bottles. The bottles are made from polyethylene terephthalate (PET), a lightweight yet strong plastic. Darley uses as much
Darley Beverages manufactures its own soda pop bottles. The bottles are made from polyethylene terephthalate (PET), a lightweight yet strong plastic. Darley uses as much PET recycled resin pellets in its bottles as it can, both i because using recycled PET helps Darley to meet its sustainability goals and because recycled PET is less expensive than virgin PET. (Click the icon to view more information.) Darley's management is analyzing whether the change to the bottle molds to reduce PET plastic usage should be made. Management expects the following number of soda bottles to be used in the upcoming year: (Click the icon to view the number of soda bottles.) Read the requirements. More info Darley is continuing to search for ways to reduce its costs and its impact on the environment, PET plastic is melted and blown over soda bottle molds to produce the bottles. One idea Darley's engineers have suggested is to retrofit the soda bottle molds and change the plastic formulation slightly so that 25% less PET plastic is used for each botte. The averago kilograms of PET per soda bottle before any redesign is 0.012 kg. The cost of retrofiting the soda bottle molds will result in a one-lime charge of $66,319, while the plastic reformulation will cause the average cost per kilogram of PET plastic to change from $3.00 to $3.30 Data table: Quarter 1 Quarter 2 2.000.000 Quarter 3 Quarter 4 2.400.000 2.800,000 Number of soda pop bottles to be produced. 2.500.000 For the upcoming year, management expects the beginning inventory of PET to be 3.000 kilograms, while ending inventory is expected to be 3.870 kilograms. During the first three quarters of the year, management wants to keep the ending inventory of PET at the end of each Quarter equal to 10% of the following quarter's PET coeds Print Done Print Done Da ma plas it ca sus Virg Un 59 Requirements 1. Using the original data (before any redesign of soda bottles), prepare a direct materials budget to calculate the cost of PET purchases in each quarter for the upcoming year and for the year in total. 2. Assume that the company retrofits the soda bottle molds and changes the plastic formulation slightly so that less PET plastic is used in each bottle. Now prepare a direct materials budget to calculate the cost of PET purchases in each quarter for the upcoming year and for the year in total for this possible scenario. Mu 3. Compare the cost of PFT plastic for Requirement 1 (original data) and for - X nt is analyzin T plastic usa g number of o view the nu 800000 0.012 Print Done Time Rem
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started