Polaris offers extended service contracts that provide repair and maintenance coverage over its products. As you complete the following requirements, assume that the Polaris services department uses many of Polaris’s existing resources such as its facilities, repair machinery, and computer systems.
Write a report addressing the following topics: Identify several of the variable, mixed, and fixed costs that the Polaris services department is likely to incur in carrying out its services. Assume that Polaris's services revenues are expected to grow by 25% in the next year. How do you expect the costs identified in part 1 to change, if at all?