Costco Wholesale Corporation is analyzing its warehouse operation costs using various accounting methods:

Requirements:

• Calculate the Marginal Cost of opening an additional warehouse location:
  • Variable Costs: $5,000,000
  • Fixed Costs: $2,000,000

• Implement Activity-Based Costing to allocate warehouse maintenance and logistics costs.
• Compare the costs calculated under Marginal Cost Accounting and ABC.
• Discuss how Standard Cost Accounting could improve cost estimation for new store openings.

Marginal Cost Calculation:

Category	Amount ($)
Variable Costs	$5,000,000
Fixed Costs	$2,000,000
Total Cost	$7,000,000