Response to the following problem:
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 tills 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 March:
Coke 143,000 two-liter bottles
Sprite 104,000 two-liter bottles
In addition, assume that the concentrate Costs $90 per pound far both Coke and Sprite and is used at a rate of 0.2 pound per 100 liters of carbonated water in blending Coke and 0. 15 pound per 100 liters of carbonated water in blending Sprite. Assume that two liters of carbonated water arc used for each two-liter bottle of finished product. Assume further that two-liter bottles Cost $0.10 per bottle and carbonated water Costs $0.08 per liter.
Prepare a direct materials purchases budget for March 2012, assuming no changes between beginning and ending inventories for concentrate, bottles, and carbonated water.