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Identification of Relevant and Irrelevant Cost - Coca Cola Flavored Milk
Finance & Accounting
Pages 3 (753 words)
Identification of Relevant& Irrelevant Cost – Coca Cola Flavored Milk Coca-Cola Amatil Limited (CCL) is considered for the purpose of this project which aims to identify the three relevant and three irrelevant estimations of cost in a particular project.
In the mid of 2007, the company underwent some serious planning regarding the extension of current product lines. Carbonated drinks, mineral water, fruit juices and other non-alcoholic beverages were already there in company’s product portfolio, yet the company realized the importance of adding a new product in the form of flavored milks. The launch of this new product under the name of Coca-Cola’s brand name is one of the most challenging tasks for the product managers as well as the project managers of the company. The research and development department of the company undertook rigorous workings on the proposed launch of flavored milk. The whole research process followed the different stages including planning, development of the new product, testing, commercial viability, branding, initial launch of the new product and many other activities. Each of these activities had its own cost estimates which are considered as either relevant or non-relevant. Planning Stage The planning stage is the general stage for all those products that are intended to be launched. The costs arising due to this activity are always considered as irrelevant because the planning process always keeps going on irrespective of the fact whether a new product is launched or not in the current timeframe. ...
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