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PepsiCo, Inc. is evaluating the profitability of its beverage products and needs to conduct a CVP analysis to guide decision-making. The cost accountant gathered data
PepsiCo, Inc. is evaluating the profitability of its beverage products and needs to conduct a CVP analysis to guide decision-making. The cost accountant gathered data on variable costs, fixed costs, selling price per unit, and projected sales volume for each beverage product. The data for Pepsi, Diet Pepsi, and Mountain Dew are as follows:
Pepsi:
- Variable Cost per Unit: $0.20
- Fixed Costs: $2,000,000
- Selling Price per Unit: $1.00
- Projected Sales Volume: 5,000,000 units
Diet Pepsi:
- Variable Cost per Unit: $0.15
- Fixed Costs: $1,500,000
- Selling Price per Unit: $0.80
- Projected Sales Volume: 4,000,000 units
Mountain Dew:
- Variable Cost per Unit: $0.25
- Fixed Costs: $2,500,000
- Selling Price per Unit: $1.20
- Projected Sales Volume: 3,000,000 units
Conduct a comprehensive CVP analysis for each beverage product and recommend strategic actions to maximize profitability.
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