Cost Allocation and Transfer Pricing at Coca-Cola

Requirements:

1. Implement an appropriate cost allocation method to allocate indirect costs among Coca-Cola's various product lines (e.g., soft drinks, juices, bottled water).

Product Line	Direct Costs ($)	Indirect Costs ($)
Soft Drinks	9,000,000	3,600,000
Juices	7,000,000	2,800,000
Bottled Water	8,000,000	3,200,000

2. Determine transfer pricing for internal transactions between Coca-Cola's manufacturing and distribution divisions.
3. Evaluate the impact of different transfer pricing methods (e.g., market-based, cost-plus) on profitability.
4. Recommend a transfer pricing policy that aligns with corporate strategy and minimizes tax liabilities.