A Product Line at PepsiCo (Such as the Pepsi Max

question 117

Multiple Choice

A product line at PepsiCo (such as the Pepsi Max product line) is most likely treated as a(n)

• A)cost center.
• B)profit center.
• C)investment center.
• D)revenue center.

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Definitions:

Variable Manufacturing Cost

Direct costs associated with manufacturing, changing with the level of output, including direct materials, direct labor, and variable manufacturing overhead.

Production Volume

The total quantity of goods produced within a specific period by a manufacturing entity.

Engineering Approach

A detailed analysis of cost behavior based on an industrial engineer’s evaluation of the inputs that are required to carry out a particular activity and of the prices of those inputs.

Mixed Costs

Expenses that have both fixed and variable components, changing with the level of activity but having a base cost.