Question

What are Pepsi Company's products and operations? Also, what are 5 costs that the company would probably incur and their cost behavior?

Answer 1

Pepsi Company mainly operates in Beverages and Foods. Some of its product brands are listed below: ( List is illustrative)

• Pepsi
• Diet Pepsi
• Lay's
• Cheetos
• Aquafina
• Tropicana
• Fritos
• Quaker oats

Pepsi Company will be having its own manufacturing sites for manufacturing the products and it will also get it manufactured with the help of third parties through contract manufacturing.

Cost incurred and their cost behavior:

1.Raw Material and Packing Material:

Raw material and packing material would form bulk of the cost of products for pepsi co. These costs are part of prime cost and directly variable in nature. Some of the raw material needed by Pepsi co would be water, potatoes, preservatives, salt, etc. Packing material would be Carton boxes, laminates, etc

2.Depreciation of Plant and Machinery:

Pepsi company will have plant and machinery in its factory operations. Depreciation on these will form part of manufacturing cost and will be fixed in nature.

3. Repairs and Maintenance:

Repairs and Maintenance for factory assets will form part of manufacturing cost. It will be semi-variable in nature. Some part of expenses will be fixed and some part of expenses will vary according to production

4. Salary Expenses:

Expenses of labor in production floor will be part of Direct cost and it will be variable cost. Salaries of employees deployed in admin and corporate office will be fixed

5. Travel Expenses:

Travel expense will be incurred for personnel travel during the year in performing office duties. These expenses will be fixed in nature and will be budgeted for the year.