Financial & Managerial Accounting.

The Pepsi Company hardly needs an introduction. A line taken from the cover of a recent annual report says it all: If you measured time in servings of PEPSI, "a billion PEPSI's ago was yesterday morning." On average, every U.S. citizen drinks 4000-ounce servings of PEPSI products each year. PEPSI's primary line of business is the making and selling of syrup to bottlers. These bottlers then sell the finished bottles and cans of PEPSI to the consumer. In the annual report of PEPSI, the information shown below was provided. THE PEPSI COMPANY Management Discussion Our gross margin declined to 60 percent this year from 65 percent in the prior year, primarily due to costs for materials such as sweeteners and packaging. The increases [in selling expenses) in the last two years were primarily due to higher marketing expenditures in support of our Company's volume growth. We measure our sales volume in two ways: (1) gallon shipments of concentrates and syrups and (2) unit cases of finished product (bottles and cans of pepsi sold by bottlers). Answer the following question : In your opinion, PEPSI's marketing Give justification for your answer. xpenditures a fixed cost, variable cost, mixed cost