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A restaurant recently introduced a more sophisticated wine list to appeal to its changing customer base. The bartenders and servers know how to up-sell food

A restaurant recently introduced a more sophisticated wine list to appeal to its changing customer base. The bartenders and servers know how to up-sell food items to their customers, but they dont know wine. The restaurant owners decide that they need to provide training.

A sommelier (wine specialist) is brought in to conduct a customized in-house training session at the restaurant. The success of the training will be measured using the wine sales figures.

Three months following the training, wine sales figures improved! The sales were approximately $12,000 better than the month prior to the training. The total cost of the training was $4,000. Training costs included:

  • A portion of the restaurants utility costs (i.e. heat/electricity)
  • Sommeliers fee to deliver the training
  • Wine/food provided at the training
  • Time for staff to attend

The owners are now in the process of determining the financial benefits of the training program. Their first step is to assign the above training costs to one of the following categories:

Direct costs, indirect costs, overhead costs, development costs, trainee compensation costs

Assign each training cost to the appropriate costing category and explain your reasoning.

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