i-Case One Running and Growing a Business Sherri has always loved to fix healthy snacks for family and friends and about a year ago she started to sell boxes of them at the local farmer’s market. Last week she heard from a local grocery chain that also wants to stock them. When Sherri was treating her snacks as a hobby, she never paid attention to the costs. Now, she needs to get a better understanding of the costs and cost behavior patterns. At this point she plans to rent a small space for the snack operation and to store inventory. She also has arranged for some part time help to support the snack making operation. These part-time workers will be paid a flat amount per box of snacks and will only be called into work if the volume of business makes it necessary. She also plans to hire someone to help stimulate additional sales. This salesperson’s compensation will include a small salary and a commission of a $1.00 for each box of snacks sold. For question 1-3 determine the most likely cost behavior pattern. 1 The rent on the space would most likely be: a. Variable b. Fixed c. Mixed d. Step 2. The dates and nuts used to make the snacks would most likely be: a. Variable b. Fixed c. Mixed d. Step 3. The salesperson’s compensation would most likely be: a. Variable b. Fixed c. Mixed d. Step.
i-Case One Running and Growing a Business Sherri has always loved to fix healthy snacks for family and friends and about a year ago she started to sell boxes of them at the local farmer’s market. Last week she heard from a local grocery chain that also wants to stock them. When Sherri was treating her snacks as a hobby, she never paid attention to the costs. Now, she needs to get a better understanding of the costs and cost behavior patterns. At this point she plans to rent a small space for the snack operation and to store inventory. She also has arranged for some part time help to support the snack making operation. These part-time workers will be paid a flat amount per box of snacks and will only be called into work if the volume of business makes it necessary. She also plans to hire someone to help stimulate additional sales. This salesperson’s compensation will include a small salary and a commission of a $1.00 for each box of snacks sold. For question 1-3 determine the most likely cost behavior pattern.
1 The rent on the space would most likely be: a. Variable b. Fixed c. Mixed d. Step
2. The dates and nuts used to make the snacks would most likely be: a. Variable b. Fixed c. Mixed d. Step
3. The salesperson’s compensation would most likely be: a. Variable b. Fixed c. Mixed d. Step.
Step by step
Solved in 3 steps
