Gypsy Joes operates a chain of coffee shops. The company pays rent of

QUESTION

Gypsy Joes operates a chain of coffee shops. The company pays rent of $10,000 per year for each shop. Supplies (napkins, bags and condiments) are purchased as needed. The managers of each shop are paid a salary of $2,500 per month and all other employees are paid on an hourly basis. The costs of supplies relative to the number of customers in a particular shop and relative to the number of customers in the entire chain of shops is which kind of cost, respectively?
Solution: Supplies (napkins, bags and condiments) are purchased as needed which means that the purcahe si not fixed and the usage of supplies varies based on the number of customers. Hence, the costs of supplies relative to the number of customers¦

in a particular shop as well as relative to the number of customers in the entire chain of shops are variable cost. So, The option is VARIABLE COST / VARIABLE COST

ANSWER:

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