Question
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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