Coca Cola Evaluation

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The Coca Cola Company
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The Following involves the analysis of the costing techniques followed by the company along with its Budgeting system. It also involves the Investment appraisal analysis for the given data. [Type the author name]

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TABLE OF CONTENTS:

CONTENTS:
1)INTRODUCTION…………………………………………………………………....03 2)FOUNDATION AND HISTORY…………………………………………………...03 3)COSTING TECHNIQUES…………………………………………………………..04 4)COCA COLA’S COSTING TECHNIQUE ………………………………………..05 5)BUDGETING SYSTEMS…………………………………………………………….06 6)BUDGETING SYSTEM OF COCA COLA……………………………………… 07 7)INVESTMENT APPRAISAL ANALYSIS…………………………………………..10 8)CONCLUSION…………………………………………………………………………12 9)REFERENCES………………………………………………………………………….13

INTRODUCTION:
“Share a COKE , Share the happiness”.
The above statement is the slogan for the Coca-cola Company which has now become 125 years old. The slogan says Share the Happiness , it is a notable fact that the Costing technique and the budgeting system is one of the factors responsible for bringing out that happiness. The following assignment involves the Analysis of the costing techniques and the costing technique followed by the company along with the Budgeting system of the company. The History of the Coca-cola Company can be briefly explained as follows : The Foundation and Progress :

It was in the year 1886 when Dr.John Pemberton created a great-tasting beverage that was first served as a fountain dring at Jacob’s Pharmacy in Downtown , Atlanta ,Georgia. The business started small, with a modest nine drinks served a day. In the 1920s,Robert Woodruff, then President of the Coca Cola Company, envisioned global expansion and developed a separate organization within the Company specifically designed to market and sell coca cola outside the United States. By 1930, Coca-cola was bottled in 27 countries. The subsequent years brought continued product expansion, particularly during the world war time period. Over the years, Coca-cola gained popularity worldwide and with it the consumer demand for new products and packaging emerged with the growth in the beverage portfolio.The current year 2011 marks the 125th anniversary of coca cola which has seen unbelievable growth and expansion reaching upto 200 countries in the world with over 500 brands and 3500 beverage products. (Reference: The story of Coca cola – Lonnie Bell , The annual report of Coca Cola 2010) COSTING TECHNIQUES :

The most common costing techniques followed by major MNC (Multi National Companies) would include Absorption Costing Technique and Marginal Costing Technique. The new method introduced to the list is Activity Based Costing Technique, which is generally used as a internal decision-making tool. The Efficiency of a company’s performance is based on the type of costing technique the company uses and the Budgeting system it follows. Focusing on the costing techniques, The Absorption costing technique is a costing technique where all normal costs whether it is variable or fixed costs are charged to cost units produced.

Process costing is used by companies that produce many units of essentially the same product, like Coca-Cola Co. or Scott's paper towels. The costs incurred in producing such homogeneous products are pretty much the same for every unit produced. Basically the definition for Process costing is that it is an accounting system that gathers direct and indirect costs of manufacturing and then averages them out into a "cost per unit" for each product. Process costing is the opposite of Job costing, which determines the specific cost for each task in a procedure of creating a product. (References: Life cycle:Costing techniques,models and applications by B.S.Dhillon Accounting and Finance in Business by Mike Bendrey ,Roger Hussey,Colston West College accounting coach)

COCA COLA’S COSTING TECHNIQUE:
The Coca Cola Company operates in more than 200 countries and markets more than...
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