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This assignment will use Coca$-$Cola Consolidated Inc. $($ticker symbol COKE$).$ Here is a link to the company's most recent financial statements: COKE $10-$K for $2023.$ This is the largest bottler of Coca$-$Cola in the US and is a separate business from The Coca$-$Cola Company $($ticker KO$).$

In "Item $1.$ Business" under the subheading "Raw Materials" on page $4,$ several items that are used in the manufacturing of beverages are listed. Some of those items are listed below. Assume that a batch of beverage is considered the cost object. For each item, indicate whether it would be classified as a direct cost or an indicated cost. You can add an explanation of your decision in the last column if you want.

$\backslash$table$[[,$Classification as$,],[$Item:$,$Direct,Indirect,Explanation$],[$Concentrates$,,,],[$Sweetener$,,,],[$Carbon Dioxide,,,$],[$Plastic bottles,,,$],[$Other packaging materials,,,$],[\backslash$table$[[$Equipment for production of$],[$nonalcoholic beverages$]],,,]]$

In "Note $1-$Summary of Significant Accounting Policies" review these subheadings on page $49$:

"Cost of Sales",

"Selling, Delivery and Administrative Expenses," and

"Shipping and Handling Costs."

Does Coke consider shipping and handling costs and advertising costs to be direct or indirect costs in the manufacturing of its products? Please explain your answer.

Assume that when Coke ships finished goods from its manufacturing locations to sales distribution centers each shipment includes several different products. For example, Coke, Sprite, Dr$.$ Pepper. Assume that Coke would like to allocate the shipping costs among the various products. What would

$10$

you suggest they use for the cost driver? Please explain your answer.

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