2.13Classificationofcosts,servicesector(15-20minutes)

Presta-ServiosSAisamarketingresearchfirmthatorganisesfocusgroupsforconsumerproduct companies.Eachfocusgrouphaseightindividualswhoarepaid9000persessiontoprovide commentsonnewproducts.Thesefocusgroupsmeetinhotelsandareledbyatrainedindepend- ent marketing specialist hired by Presta-Servios. Each specialist is paid a fixed retainer to conductaminimumnumberofsessionsandaper-sessionfeeof360000.APresta-Serviosstaff memberattendseachsessiontoensurethatallthelogisticalaspectsrunsmoothly.

Required

Classify each of the following cost items as:

aDirect or indirect (D or I) costs with respect to each individual focusgroup.

bVariableorfixed(VorF)costswithrespecttohowthetotalcostsofPresta-Servioschange as the number of focus groups changes. (If in doubt, select the cost type on the basis of whetherthetotalcostswillchangesubstantiallyifalargenumberofgroupsareconducted.)

You will have two answers (D or I; V or F) for each of the following items:

Costitem DorI V orF

A Paymenttoindividualsineachfocusgrouptoprovidecommentsonnew products

BAnnual subscription of Presta-Servios to Consumer Reportsmagazine

CPhonecallsmadebyPresta-Serviosstaffmembertoconfirmindividuals will attend a focus group session. (Records of individual calls are not kept)

DRetainerpaidtofocusgroupleadertoconduct20focusgroupsperyearon new medicalproducts

EHotel meals provided to participants in each focusgroup

FLease payment by Presta-Servios for corporateoffice

G Cost of tapes used to record comments made by individuals in a focus groupsession.(Thesetapesaresenttothecompanywhoseproductsare beingtested)

H Petrol costs of Presta-Servios staff for company-owned vehicles. (Staff members submit monthly bills with no mileage breakdowns)