Scenario

Analyse the given real$-$life scenario and apply Activity$-$based costing to compute the unit cost of each product and set effective price by considering the profit and discount margin.

PepsiCo, Inc. is an American multinational food, snack, and beverage corporation headquartered in Harrison, New York. PepsiCo has interests in the manufacturing, marketing, and distribution of grain$-$based snack foods, beverages, and other products. Company produce three soft drinks details are given below.

Miranda

During the production of $200,000$ units of Miranda, Company had $400$ Machine Setups. Direct expenses of the company were $$460,000,$ Company had $2,000,000$ material moves, Direct labour cost of the company was $1000$ direct labours with a salary of $$1,120$ for each labour. Machine A was used $224,000$ hours for producing $200,000$ units of Miranda. Company used $2,000$ units of direct materials @ $$310$ per unit. Profit margin of the product is $10\%$ of total cost and Discount margin $2\%$ of unit cost. Calculate the selling price per unit after discount.

Mountain Dew

During the production of $600,000$ units of Mountain Dew, Company had $600$ Setups. Direct expenses of the company were $$200,000,$ Company had $400,000$ material moves, Direct labour cost of the company was $500$ direct labours with a salary of $$800$ for each labour. Machine A was used $176,000$ hours for producing $600,000$ units of Mountain Due. Company used $1,000$ units of direct materials @ $$400$ per unit. Profit margin of the product is $8\%$ of total cost and Discount margin $3\%$ of Unit cost. Calculate the selling price per unit after discount.

Tropicana

During the production of $100,000$ units of Tropicana, Company had $200,000$ material moves. Direct expenses of the company were $$140,000,$ Company had $200$ machine setups, Direct labour cost of the company was $1,000$ direct labours with a salary of $$200$ for each labour. Machine A was used $135,000$ hours for producing $100,000$ units of Tropicana. Company used $500$ units of direct materials @ $$300$ per unit. Profit Margin of the product is $8\%$ of Unit cost and Discount margin $5\%$ of Unit cost. Calculate the selling price per unit after discount.

Common information$$s for all the three products

Total direct labour cost for three products were $$1,720,000.$ Total Setups cost for three products were $$72,000.$ Total direct material cost for three products were $$1,170,000.$ Total Material Moves cost for three products were $$1,600,000.$ Total direct expenses for three products were $$800,000.$ Total Machine Hours cost for three products were $$1,120,000.$