Coca-Cola Company
Overview
Coca-Cola Company is one of the biggest beverage and carbonated soft drink manufacturer based in Atlanta, Georgia. Based on the Interbrand’s study conducted globally in 2015, Coca-Cola was the third more valuable brand. Their most commonly used ingredients include carbonated water, sugar, caffeine, phosphoric acid, caramel color, and natural flavorings. The actual production and distribution of this company are through a franchising model.
Production Process Outline/Flowchart
The production process of the carbonic drinks begins with fruit juices, flavors, sugar, and beverage or concentrate base. The finished products are then packaged in glass bottles or PET, bag in box, metals or kegs.
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Water treatment: First, the production process uses water that has been subjected to a special treatment to ensure the correct concentration and microbiology safety of natural dissolved ingredients. This is in compliance with specific sensory and compositional characteristics.
The syrup: It is prepared using dissolve sugar in special thanks to treated water. The solution is then filtered to remove any impurities. Then this syrup is mixed with "concentrate" or the various "basic preparations" thus becoming the final syrup product. As a form of preservation of sensitive products from losing their sensory features in their lifespan, a flash pasteurization thermal is used for this process ( Ashurst, 2016).
Filling and packaging: The final syrup is mixed with cooled and treated water. Carbon dioxide is then added for sparkling drinks which gives these drinks its effervescence characteristic. After this, the drink is ready to be packaged. For every duration of hours, thousands of cleaned container are hermetically filled and sealed, tested and coded with modern automatic plants. The drinks in glass bottles are packaged in boxes whereas PET bottles, the non-returnable glass bottles, and cans are stored into various multi-packs.
Manufacturing Process Flowchart
Cost object
A cost object includes a department or product for costs are measured or accumulated. For instance, a cost object for a direct labor, manufacturing overhead, and direct materials is a product. For Coca-Cola Company one of the production is one of the cost objects and it consists of direct and indirect costs.
Costs for Manufacturing Process Step 2 (Syrup Preparation)
Salary and Wages, Rent, Utilities, Insurance, Depreciation, Taxes, Material, Equipment Repair & Maintenance, Industrial engineering, storage and warehousing fee, lease, auditing fees, and incidental costs.
Step 3 Costs
| Direct Variable | Direct Fixed | Indirect Variable | Indirect Fixed |
| Salary & Wages | Industrial Engineering | Incidental costs | Rent |
| Material | Storage fee | utilities | Depreciation |
| Audit fee | Taxes | Lease | |
| Repair & Maintenance |
Direct material costs are incurred in materials which can be easily identified and traced as during the manufacturing process as the final product. In this company, some of the direct materials include syrup, bottles, label, and other manufacturing ingredients and packaging ( Fera et al. 2017)
Indirect material costs are spent on materials although they cannot be directly traced to the final product. In manufacturing Coca-Cola drinks, some of the indirect material include oil and fuels for machines, property taxes, electricity, and advertising. Advertising is one of the major indirect costs as it is widely conducted on all media platforms in the world.
Direct labor costs include all the expenditures of labor that are traceable to the final products. Some of these costs are related to employees and also, they can be associated direct and physically with the conversion of raw materials into finished goods. Most of the direct costs in the Coca-Cola company include wages for a worker who take part in cutting, assembling, mixing, packaging and other activities that directly contribute to the production.
Indirect labor cost is incurred in task and activities that cannot be directly linked to the produced goods. In Coca-Cola company, some of the indirect labor costs include that of inspectors, janitors and the human resource department in general.
References
Ashurst, P. R. (2016). Chemistry and technology of soft drinks and fruit juices . John Wiley & Sons.
Fera, M., Fruggiero, F., Costabile, G., Lambiase, A., & Pham, D. T. (2017). A new mixed production cost allocation model for additive manufacturing (MiProCAMAM). The International Journal of Advanced Manufacturing Technology , 92 (9-12), 4275-4291.
