Budgets Research Paper Example | Topics and Well Written Essays - 1000 words

Budgets - Research Paper Example According to its mission, PepsiCo is a company in the consumer products business (PepsiCo, 2009). It focuses on manufacturing and distributing convenient foods and beverages. Its products include Pepsi Cola and other soft drink brands, Frito Lay, Tropicana, Quaker and Gatorade (PepsiCo, 2009). The types of budget that will be used by any company should conform to the main business of the said company. In PepsiCo’s case, being a company in the food and beverage industry, its budgets should be tailored to its specific needs and targets. The first recommended budget is the advertising budget. Since PepsiCo produces consumer products, these products should be marketed to the widest range of potential customers as much as possible. To do this, PepsiCo needs to aggressively advertise its products and even how it positions its products. Such a move will cost a lot of advertising expenses for PepsiCo, expenses that should be estimated or projected and placed in an advertising budget. This advertising budget includes how much PepsiCo expects to spend in advertising over a period of time (usually within one year) in various advertising vehicles such as print, media and even online. The second recommended budget is the department budget, which is usually prepared on an annual basis, but with a monthly breakdown. This type of budget is prepared for a company that has â€Å"multiple sales revenue units† (Jagels and Ralston, 2006, p. 370). Since PepsiCo has different product lines, the company can treat each product line as a department and draw up a budget specific to that product line. Since the department budget will show the revenues and expenses for the given product line, PepsiCo can immediately analyze which product line is the most profitable for the company, which has a positive contribution to the company’s bottom line and which products need to