The Coca-Cola Company is one of the most famous businesses in the world. With 200 brands worldwide, the company is a leading producer of coffee, tea, juices, sparkling soft drinks, and others (Coca-Cola Company, n.d.). It is not a surprise that the business has numerous production facilities all over the globe and incurs enormous manufacturing costs. The company deals with labor, material, and overhead costs that can be further classified into fixed, variable, or mixed ones.
The Coca-Cola Company incurs various manufacturing costs to make its products available for buyers. According to Walther and Skousen (2009), direct materials include all the physical objects that are required for manufacturing. For example, they are raw materials, packaging, various dietary additives, and other costs. Labor expenses refer to wages that are paid to employees who are directly involved in making the Coca-Cola products (Walther & Skousen, 2009). As for overhead costs, they consist of insurance, repair, taxes, communication fees, indirect labor, and others (Walther & Skousen, 2009). This information demonstrates that the Coca-Cola Company deals with three manufacturing cost categories.
It is also rational to comment on what expenses are variable, fixed, or mixed. According to Walther and Skousen (2009), the cost is variable when it is “expected to increase with each additional unit of output” (p. 37). This group includes material, labor, fuel, and other expenses. As their name suggests, fixed costs do not fluctuate irrespective of how much produce is manufactured (Walther & Skousen, 2009). Rent and property taxes are the most evident examples of these expenses. Finally, mixed costs imply both a fixed and variable component (Walther & Skousen, 2009). Mobile communication fees are a suitable example because a monthly payment is used together with excess minutes’ costs. Thus, the paper has presented an overview of the Coca-Cola Company’s manufacturing costs.
References
Coca-Cola Company. (n.d.). Brands.Web.
Walther, L. M., & Skousen, C. J. (2009). Managerial and cost accounting. Ventus Publishing ApS.