Cost Accounting Report: Coca-Cola Product Cost and Competitor Analysis

This report provides a comprehensive cost accounting analysis of Coca-Cola, examining various aspects of its product costing. It begins with an introduction and details the product's manufacturing locations. The report calculates the gross margin and cost of the product, comparing it with a competitor's (PepsiCo) gross profit. It then analyzes the differences in costs between the two competitors. The value chain concept is applied to the product, identifying relevant costs for each segment. Research on a critical ingredient (sugar) and its price fluctuations is included. The report concludes by highlighting opportunities for cost management, particularly in inventory. The analysis suggests that Coca-Cola is performing well in terms of profit margins, recommending continued efforts to maintain performance. References are provided for the research sources used.

Running head: COST ACCOUNTING
Cost Accounting
Name of the Student:
Name of the University:
Authors Note:

1COST ACCOUNTING
Table of Contents
Introduction:...............................................................................................................................2
1. Product manufactured...........................................................................................................3
2. Gross Margin and cost of the product....................................................................................3
3. Competitors Product...............................................................................................................3
4. Comparison between two competitors...................................................................................4
5. Value chain concept...............................................................................................................4
6. Research.................................................................................................................................5
7. Opportunities..........................................................................................................................5
Conclusion:................................................................................................................................5
Reference....................................................................................................................................6

2COST ACCOUNTING
Introduction:
In the following project an effort has been made to ensure that all the relevant details
pertaining to the Coca Cola plant is being discussed in the most effective and efficient way.
The details that are going to be covered in the following project pertain to the details
regarding the end product. Some of the relevant details of the project are as follows:
1. Product manufactured
The product is being manufactured all around the globe. There are several manufacturing
plants that are engaged in the production of the product. Some of the cities where the plant is
located include Morrilton, Los Angeles, Ocala, Trenton etc (Parker & Fleischman, 2017).
2. Gross Margin and cost of the product
The gross profit margin of the company is as follows:
Calculation of the gross profit (Coca Cola )
Particulars Amount ($)
Gross Profit 22154
Total revenue 35410
Gross Profit ratio 63%
The cost price of the product that is being produced by the Coca Coal Company is as
follows:
Calculation of the cost price of the product
Particulars Amount ($)
Selling price of the product 0.99
Gross Profit Margin 0.37
Cost of the product 0.62

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3. Competitors Product
The gross profit that is being earned by PepsiCo is as follows:
Calculation of the gross profit (Pepsi )
Particulars Amount ($)
Gross Profit 30472
Total revenue 73339
Gross Profit ratio 42%
It can be seen that the revenue that is being generated by the company is much lower than
the gross profit revenue that is being generated by the coca coal company. The reason for that
being that the company is not able to reduce the cost that is being incurred by it for the
purpose of producing its product (Christ & Burritt, 2015). With the increase in the cost that is
being incurred in the production of the product the gross profit of the company is less than
that of the coca cola company.
4. Comparison between two competitors
The cost of the product that is produced by the coca cola and PepsiCo are not very apart
drastically. The main difference that lies is in the amount that is being incurred by the
company on producing the product. The cost incurred by the coca coal company in the
production process is less than that of its competitor.
5. Value chain concept
It is a concept that is used to describe the entire process by which the company
acquires the raw materials add values to them through various processes and then makes a
finished product out of it (Wan et al.,2015).

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One of the most important parts of the cost that is relevant for the product includes the
inventory management cost. The inventory with the company is huge and the amount
invested in managing is hue and hence requires proper care on the part of the management.
6. Research
One of the most important ingredients of the product is sugar. Due to the change in the
environmental and the logistical condition the prices of the sugar has arisen over the period of
time. Hence the company must ensure due monitoring of the same.
7. Opportunities
Some of the ways to offset the prices of the products in front of the company is that it
pays due cognizance to the fact that the inventory that is being held up by it requires
investment and hence the same requires immediate attention of the company (Wan et al.,
2015).
Conclusion:
It is concluded from the above analysis that the coca coal company is performing very
well in terms of the performance and the profit margin that is being recorded by it. Hence it is
recommended that the company continues to follow the same course of action and ensure that
due care is being taken that performance is being maintained.

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Reference
Chompu-Inwai, R., Jaimjit, B., & Premsuriyanunt, P. (2015). A combination of Material
Flow Cost Accounting and design of experiments techniques in an SME: the case of a
wood products manufacturing company in northern Thailand. Journal of Cleaner
Production, 108, 1352-1364.
Christ, K. L., & Burritt, R. L. (2015). Material flow cost accounting: a review and agenda for
future research. Journal of Cleaner Production, 108, 1378-1389.
Parker, L. D., & Fleischman, R. K. (2017). What is Past is Prologue: Cost Accounting in the
British Industrial Revolution, 1760-1850. Routledge.
Wan, Y. K., Ng, R. T., Ng, D. K., & Tan, R. R. (2015). Material flow cost accounting
(MFCA)–based approach for prioritisation of waste recovery. Journal of Cleaner
Production, 107, 602-614.