Question
Cost Behavior in Real Companies Choose a company (Whole Foods) with which you are familiar that manufactures a product or provides a service. In this
Cost Behavior in Real Companies
Choose a company (Whole Foods) with which you are familiar that manufactures a product or provides a service. In this activity, you will be making reasonable estimates of the costs and activities associated with this company; companies do not typically publish internal cost or process information.
Basic Discussion Questions
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Describe the company you selected and the products or services it provides.
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List ten costs that this company would incur. Include costs from a variety of departments within the company, including human resources, sales, accounting, production (if a manufacturer), service (if a service company), and others. Make sure that you have at least one cost from each of the following categories: fixed, variable, and mixed.
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Classify each of the costs you listed as either fixed, variable, or mixed. Justify why you classified each cost as you did.
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Describe a potential cost driver for each of the variable and mixed costs you listed. Explain why each cost driver would be appropriate for its associated cost.
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Discuss how easy or difficult it was for you to decide whether each cost was fixed, variable, or mixed. Describe techniques a company could use to determine whether a cost is fixed, variable, or mixed.
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