Data table For the upcoming year, management expects the beginning inventory of PET to be 13,920 kilograms, while ending inventory (before any redesign) is expected to be 15,400 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 30% of the following quarter's PET needs. Darley Beverages manufactures its own juice 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 because using recycled PET helps Darley to meet its sustainability goals and because recycled PET is less expensive than virgin PET. Darley is continuing to search for ways to reduce its costs and its impact on the environment. PET plastic is melted and blown over juice bottle moulds to produce the bottles. One idea Darley's engineers have suggested is to retrofit the juice bottle moulds and change the plastic formulation slightly so that 20% less PET plastic is used for each bottle. The average kilograms of PET per juice bottle before any redesign is 0.016kg. The cost of retrofitting the juice bottle moulds will result in a one-time charge of $68,170, while the plastic reformulation will cause the average cost per kilogram of PET plastic to change from $3.00 to $3.30. Darley's management is analyzing whether the change to the bottle moulds to reduce PET plastic usage should be made. Management expects the following number of juice bottles to be used in the equirement 1. Using the original data (before any redesign of juice bottles), prepare a direct materials budget to calculate the cost of PET purchases in each quarter for the upcoming year and for equire year in total. tart by preparing the direct materials budget through the total quantity needed, and then complete the budget. (Round all answers to the nearest number. For the quantity of direct materials eeded per unit, enter round your answer to three decimal places X.XXX. Use parentheses or a minus sign for beginning inventory balances. Round cost per kilogram to the nearest ent.) \begin{tabular}{lll} \hline & Quarter 1 \\ \hline Units to be produced \\ Quantity of direct materials needed per unit \\ Quantity of PET needed for production \\ Plus: Desired ending inventory \\ Total quantity needed \\ Less: Beginning inventory of direct materials \\ Quantity to purchase \\ Cost per kilogram \\ Total cost of direct material purchases \end{tabular} Requirement 2. Assume that the company retrofits the juice bottle moulds and changes the plastic formulation slightly so that less PET plastic is used in each bottle. Now prepare a direct materials judget to calculate the cost of PET purchases in each quarter for the upcoming year and for the year in total for this possible scenario. Start by preparing the direct materials budget through the total quantity needed, and then complete the budget. (Round all answers to the nearest number. For the quantity of direct materials needed per unit, enter round your answer to three decimal places X.XXX. Use parentheses or a minus sign for beginning inventory balances. Round cost per kilogram to the nearest Requirement 3. Compare the cost of PET plastic for Requirement 1 (original data) and for Requirement 2 (making change to using less PET.) What is the direct material cost savings from making ihe change to using less PET? Compare the total of those savings to the cost of retrofitting the juice bottle moulds. Should the company make the change? Explain your rationale. (Round all answers to the nearest dollar.) Begin by computing the direct material cost savings from makinq the chanqe to using less PET
