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Apply ABC in PepsiCo to allocate manufacturing costs across different product lines. Identify cost drivers such as production runs, machine hours, and labor hours. Allocate

Apply ABC in PepsiCo to allocate manufacturing costs across different product lines.

Identify cost drivers such as production runs, machine hours, and labor hours.

Allocate costs to product lines like beverages, snacks, and health foods based on their production complexity.

Analyze line profitability using ABC allocations and recommend strategies to optimize production.

Prepare a report showing the cost allocations and profitability analysis.

Cost Drivers

Allocation Basis

Annual Cost Allocation ($)

Production Runs

Number of runs

$70,000,000

Machine Hours

Number of hours

$60,000,000

Labor Hours

Number of hours

$50,000,000

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