Cost behavior, cost classifications Shannon O'Reilly is trying to decide whether to continue to take public transportation to work or to purchase a car. Before making her decision, she would like to compare the cost of using public trans¬ portation and the cost of driving a car.

REQUIRED

(a) What activity measure should Shannon use as she estimates the cost of driving?

(b) What should Shannon view as incremental (flexible or out-of-pocket) costs of driving from home to work?

(c) What are some capacity-related costs of driving a car?

(d) Suppose that if Shannon purchased a car, she would use it to take a two- week scenic vacation by car. What activity measures might Shannon use to estimate her vacation and lodging expenses?

(LO 1, 3)