Starbucks Corporation is the number I specialty coffee retailer, operating more than 2,800 shops. The company also sells coffee beans to restaurants, businesses, airlines, and hotels, and offers mail order and on-line shopping. 1. Go to http://www.Forbes.com and under "Stocks" type SBUX, the stock symbol for Starbucks Corporation. Click on Go. In the left-hand column, click on Company Info. and scan the information provided. What one-year sales growth was reported? 2. In the left-hand column, click on Financials. For the most recent year identify or computer the amounts reported for total revenue, cost of goods sold, and operating expenses. Calculate operating income. 3. Is Cost of Sales a variable or fixed expense? Add the operating expenses (Store Operating Expenses, Other Operating Expenses. Depreciation. and General/Administrative Expenses) and assume that 40% of the total is fixed. Compute total variable operating expenses and total fixed operating expenses for the most recent year. 4. Consider each of the following independent situations regarding next year:

a. Suppose Starbucks is anticipating a 9% increase in the number of transactions per store next year. Prepare the sales budget, cost of goods sold budget, and operating expense budget, and calculate budgeted operating income.

b. Assume Starbucks is considering raising the price of beverages by 7 cents per cup because of a 10% increase in fixed operating costs. If the increase of 7 cents per cup increases revenues by 3%, will the increase in revenue cover the increase in costs?

c. Suppose that due to opening new stores. Starbucks expects operating revenues to increase at the same rate as the one-year sales growth of last year. Prepare only the sales budget. Will fixed costs increase? Why or why not? 5. A Starbucks store is what type of responsibility center?