QUESTION: 1A- Are sweeteners and packaging a variable cost or a fixed cost? What is the impact on the contribution margin of an increase in the unit cost of sweeteners or packaging? What are the implications for profitability? Sweeteners and packaging are direct materials for the production of Coca-Cola, the variable value in cost behavior depends on the production volume and level of business activity, so these are variable costs (vary in total, fixed in per unit ), when fixed costs (constant in total, vary per unit). according to the formulas: Contribution margin = total revenues – variable costs When an increase in the unit cost of sweeteners and packaging (variable cost) the decrease in the contribution margin assumes that total revenues are constant and net profit decreases. So the break-even point has been reached. Break – even point = contribution margin equal to total fixed costs, no profit or loss Based on this ratio Break – even point in units = fixed costs ÷ contribution margin per unitThe relationship between BEP and contribution margin is inversely proportional, meaning that the contribution margin decreases, the break-even point increases. (Hoggett, 2012, p: 467-471). An example budget shows the relationship between contribution margin and profit. Assume sales per unit = $1 Variable cost per unit = $0.25 Variable cost per unit after increase = $0.40 Old New (after increase in unit cost of sweeteners and packaging) Sales revenue (100 units) $ 10025 $ 10040Variable costsContribution margin 7540 6040Fixed costsNet profit $35 $20 in the example, reaching the contribution margin value of at least ...... half of the sheet ......ch represents the quantity of finished product that the bottling system sells to retail customers. In the case of this unit, volume more accurately measures the underlying strength of the business system because it measures trends at the retail level and is less influenced by inventory management practices at the wholesale level. (University of Illinois at Chicago, 2000). The reason why Coca-Cola uses two different measurements to identify the cause contributing to the decrease in gross margin and know the points of deterioration in production or marketing and how managers avoid it. On the other hand the company has adopted this approach:- Reducing the production budget.- Increasing the spread of its branches worldwide through the bottler license.- Providing a large number of job opportunities worldwide, thus helping to reduce unemployment rates. for many countries.