Uploaded by ishita bosamia

Assignment4individual

advertisement
Keurig Dr. Pepper Inc (KDP) is a beverage distributor company of coffee, carbonated
soft drinks, tea, water, juices, and more. The value that the firm provides to its customers
includes a variety of options that its consumers can choose from while also making the effort to
be eco-friendly. They offer customers hot and iced teas, hot cocoa, ground coffee, and traditional
whole-bean coffee. Its main income drivers are packaged beverages which make up 47% of its
$14 billion-dollar total revenue over the year 2022. It will continue to be its driving source of
income for the upcoming years to follow. KDP’s daily operations are producing the final
product of these beverages to meet the consumer’s needs and it is why the company has become
successful. Keurig Dr. Pepper has a portfolio of more than 125 owned, licensed, partner, and
allied brands, with leadership across numerous beverage categories. Keurig Dr. Pepper Inc.,
formerly known as “Green Mountain Coffee Roasters and Keurig Green Mountain”, is a publicly
traded American beverage and coffee maker and its headquarters is located in Burlington,
Massachusetts. KDP is not just a beverage company that is solely focused on revenue, the firm
partners with organizations and associations to fight the freshwater crisis that our world is facing.
Studies show that freshwater is declining and recently KDP has announced that they will aspire
for Net Positive Water Impact by 2050. This decision will be beneficial in the long run because
they will keep their profit margins relatively stable without the cost of input increasing as
freshwater declines
As a beverage business, Keurig Dr. Pepper (KDP) is likely to use process costing to
determine the cost of its goods. The average cost of identical products made in large quantities is
determined using the cost accounting method known as process costing. In the case of KDP, it
uses a continuous manufacturing process to create a large number of drinks that are exactly the
same. Soft drinks, juices, teas, and coffees are just a few of the many beverages that KDP makes.
It is difficult to correctly determine the cost of each of these products using job costing because
they each require different ingredients and manufacturing procedures. Many businesses are
definitely going to use process costing to determine the cost of their products when taking the
beverage sector into account. This claim is supported by two factors, the first one is HighVolume Production: The production of numerous identical products in large amounts is a feature
of the beverage industry. Process costing is therefore the best technique for distributing costs
throughout the production process. Next, Standardized Products: The bulk of beverages are
standardized products because of products with consistent recipes and production processes.
Since these products don't need to be customized and have standardized manufacturing
procedures, job costing is not appropriate for them. To conclude, as a result of its high-volume
manufacturing and standardized products, process costing is the industry standard for cost
distribution.
Some of the company's goods can be categorized as joint products because they share a
common set of inputs and are difficult to distinguish from one another. To begin, the variety of
cold brew coffee products made by Keurig Dr. Pepper is a representation of a joint product.
Coffee grounds that have been coarsely ground are placed in cold water for a long period of time,
usually between 12 to 24 hours to create an iced coffee. The result is a rich coffee that can be
mixed with milk or water to create a cold beverage. Keurig Dr. Pepper makes a variety of cold
brew coffee products, such as pre-bottled drinks and pods that can be made with their coffee
maker machines. The ingredients used to make cold brew coffee include coffee beans, water, and
packing items like bottles or pods. Both the bottled beverages and the coffee pods are
being produced using these inputs and cannot be easily separated from each other. In light of
this, the place at which the production process splits off would be where the cold brew coffee
concentrate is made. At this stage, both the bottled beverages and the coffee pods can be made
using the concentrate. The physical units method could be used by Keurig Dr. Pepper to
distribute the joint costs of making cold brew coffee. Based on the relative physical quantities of
the jointly produced products, this technique allocates joint costs. The joint costs could be split
equally between the two products, for instance, if the firm makes 5,000 units of cold brew coffee
concentrate. 2500 of those units would make bottled beverages and the other 2500 units would
make coffee pods. Next, the variety of Snapple teas that KDP produces is another instance of a
joint product. Popular iced tea brand Snapple offers a selection of flavors, including mango,
lemonade, and berry. These flavors can come in bottled drinks and tea pods for use with its
Keurig brewing devices. Tea leaves, water, and artificial flavors are the ingredients used in the
making of Snapple teas. Both the tea pods and the bottled beverages, which cannot be
distinguished from one another, are produced using these inputs. The place at which the
production process splits off would be where the tea concentrate is made. The concentrate can be
utilized to create both tea pods and bottled drinks. The sales value at the split-off method could
be used to distribute the joint costs of producing Snapple teas. This technique allocates joint
costs based on the relative sales value of the joint products at the split-off point. For instance, if
the sales value of the tea concentrate is $5,000 and the sales value of the bottled beverages is
$7,000, the joint costs could be distributed according to the sales value ratios of $5,000/$12,000
for the tea concentrate and $7,000/$12,000 for the bottled beverages.
Works Cited
https://www.keurigdrpepper.com/en/our-company/overview
https://www.sec.gov/edgar/search/#/ciks=0001418135&entityName=Keurig%2520Dr%2520Pep
per%2520Inc.%2520(KDP)%2520(CIK%25200001418135)
https://finbox.com/NYSE:KDP/explorer/cogs
https://www.foodlogistics.com/sustainability/article/10255602/dr-pepper-snapple-group-buildsa-sustainable-distribution-center
https://www.cleverism.com/company/dr-pepper-snapple-group/
https://www.jabholco.com/documents/6/KDPRatingsReportS&P_Mar-31-2022.PDF
https://www.yahoo.com/now/keurig-dr-pepper-announces-aspiration130000468.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8
&guce_referrer_sig=AQAAAMTdKzB9r8NaRw9DopxFqYVpUNP5iD607IwK1vO2K_FjzoVu
BwNC4td7dI9r_gEOP0jwdCGBsueeGdVktUjyGm3e5HxINcGRP3WbwFCIFS3iJ3KplnIe4L
04OcCcvi3yEpMkpCHpi1tXcWFDEmFjFN8QLNE8TZ506nkuONYxIF-l
Download