In the context of this course, you will be asked to address the issues/questions below for Costco Wholesale Corporation (COST), www.costco.com When addressing the issues/questions, be sure to do so in the context of this course and Costco. You have been appointed as the special assistant to the Chief Executive Officer, W. Craig Jelinek, who has asked you to address the following six situations:

a) A fellow MBA alum from Lynn University, who now works in Admission at Lynn University would like to give each MBA student a benefit, which is programmed into the Lynn University ID card. This benefit would allow the student to buy the video game, Fortnite for $18. Normally the game sells for $30 and its full cost is $20. Discuss if this would be feasible, i.e. Costco is able to do this transaction without it being a donation.

b) Costco currently buys much of its shelving from a manufacturer in China. A representative from a company in Vietnam is offering to sell the shelving for 15% less than cost from the manufacturer in China. Discuss the issues that you would consider in deciding whether to accept this offer.

c) Mr. Jelinek wishes to develop an incentive plan for the store managers.

Before the plan is implemented, he wishes you to make sure that budgeting

for the stores is done correctly. He has asked you to submit a document, which

discusses the key points related to budgeting that you have learned in MBA 640. Be as thorough as possible.

d) Costco has only used absorption costing. Mr. Jelinek has asked you to explain the merits of using variable costing under certain circumstances.

e) Mr. Jelinek has asked you to explain how target costing/pricing would be used

in Costcos pricing policies.