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Direct Materials Purchases Budget

Soda Company is the largest bottler in Western Europe. The company purchases Brand 1 and Brand 2 concentrate from The Soda 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 Brand 1 and Brand 2 two-liter bottles at the Wakefield, UK, bottling plant are as follows for the month of March:

Brand 1	76,000 two-liter bottles
Brand 2	58,000 two-liter bottles

In addition, assume that the concentrate costs $78 per pound for both Brand 1 and Brand 2 and is used at a rate of 0.1 pound per 100 liters of carbonated water in blending Brand 1 and 0.15 pound per 100 liters of carbonated water in blending Brand 2. 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 March 2014, assuming inventories are ignored, because there are no changes between beginning and ending inventories for concentrate, bottles, 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).

Soda Company-Wakefield Plant Direct Materials Purchases Budget For the Month Ending March 31,2014 (assumed data) Concentrate 2-Liter Bottles Carbonated Water Materials required for production Brand 1 228 lbs. 76,000 btls 152000 ltrs Brand 2 116 58,000 116000 Total materials 344 lbs. 134000 btls 268000 1trs Direct materials unit price 78 0.08 0.06 Total direct materials to be purchased 26832 10720 16080