How much does it cost to make a soda with a SodaStream system? Original blog posting (September 25, 2013)

SodaStream experienced strong sales growth over the past few years Consumers can use to make their own soda and seltzer water Main competitors in the beverage market have seen their sales decline

Estimated costs associated with making SodaStream soda: For comparison purposes, assume that a 24-pack of Pepsi or Coke soda currently costs $7.99.

Question 1 Assume a consumer purchases the SodaStream system.  What type of cost is the SodaStream soda maker (machine)? What type of cost is the carbonator refill?  What type of cost is the SodaMix?

Question 2 Calculate the variable cost per soda made with a SodaStream system.

Question 3 Calculate the total cost per soda of SodaStream soda assuming that the consumer makes the equivalent of (a) 165 cans of soda; (b) 330 cans of soda; and (c) 990 cans of soda.

Question 4 Calculate the cost per can of Pepsi or Coke.

Question 5 Assume that a consumer plans to make one serving of soda per day with the SodaStream system. After a year, will this system save the consumer money over the cost of purchasing Pepsi or Coke in 24- packs?

Question 6 Assume that the consumer makes the calculations in Question 3 above. Upon studying the per-can costs of the 990-can level, the consumer then decides to make three servings of soda per day for a year to experience the per-can cost savings. Where is the consumer’s logic flawed in this scenario?

Question 7 What reason(s) might a consumer have for purchasing this system besides cost savings?

Question Recap Assume a consumer purchases the SodaStream system.  What type of cost is the SodaStream soda maker (machine)? What type of cost is the carbonator refill?  What type of cost is the SodaMix? Calculate the variable cost per soda made with a SodaStream system. Calculate the total cost per soda of SodaStream soda assuming that the consumer makes the equivalent of (a) 165 cans of soda; (b) 330 cans of soda; and (c) 990 cans of soda. Calculate the cost per can of Pepsi or Coke. Assume that a consumer plans to make one serving of soda per day with the SodaStream system. After a year, will this system save the consumer money over the cost of purchasing Pepsi or Coke in 24-packs? Assume that the consumer makes the calculations in Question 3 above.  Upon studying the per-can costs of the 990-can level, the consumer then decides to make three servings of soda per day for a year to experience the per-can cost savings.  Where is the consumer’s logic flawed in this scenario? What reason(s) might a consumer have for purchasing this system besides cost savings?

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Related video resources can be found at http://www.youtube.com/user/accountingheadlines Questions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu