Classification of costs, service sector. Consumer Focus is a marketing research firm that organizes focus groups for consumer-product companies. Each focus group has eight individu¬

als who are paid $50 per session to provide comments on new products. These focus groups meet in hotels and are led by a trained independent marketing specialist hired by Consumer Focus. Each specialist is paid a fixed retainer to conduct a minimum number of sessions at a per-session fee of $2,000. A Consumer Focus staff member attends each session to ensure that all the logistical aspects run smoothly.

Required Classify each ofthe following cost items as:

a. Direct or indirect (D or I) costs with respect to each individual focus group.

b. Variable or fixed (V or F) costs with respect to how the total costs of Consumer Focus change as the number of focus groups changes. (If in doubt, select the cost type based on whether the total costs will change substantially if a large number of groups are conducted.)
You will have two answers (D or I, and V or F) for each of the following items:
Cost Item D or I V or F A. Payment to individuals in each focus group to provide comments on new products B. Annual subscription ofConsumer Focus to Consumer Reports magazine C. Phone calls made by Consumer Focus staffmember to confirm individuals will attend a focus group session (records ofindividual calls are not kept)
D. Retainer paid to focus group leader to conduct 20 focus groups per year on new medical products E. Hotel meals provided to participants in each focus group F. Lease payment by Consumer Focus for corporate office G. Cost oftapes used to record comments made by individuals in a focus group session (these tapes are sent to the company whose products are being tested)
H. Gasoline costs of Consumer Focus staff for company-owned vehicles (staff members submit monthly bills with no breakdowns)