Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities. Production Budget shows the quantities of units that a company must produce to meet the budgeted sales and inventory. To Prepare: The September’s direct materials purchases budget for Incorporation L.

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Chapter 21, Problem 21.10EX

To determine

Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.

Production Budget shows the quantities of units that a company must produce to meet the budgeted sales and inventory.

To Prepare: The September’s direct materials purchases budget for Incorporation L.

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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 May: Brand 1 62,000 two-liter bottles Brand 2 47,000 two-liter bottles In addition, assume that the concentrate costs $72 per pound for both Brand 1 and Brand 2 and is used at a rate of 0.2 pound per 100 liters of carbonated water in blending Brand 1 and 0.25 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 $0.087 per bottle and carbonated water costs $0.067 per liter. Prepare a direct…

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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 May: Brand 1 67,000 two-liter bottles Brand 2 51,000 two-liter bottles In addition, assume that the concentrate costs $70 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 $0.075 per bottle and carbonated water costs $0.055 per liter. Prepare a direct…