Question

Rachael’s Restaurant, a fast-food restaurant company, operates a chain of restaurants across the nation. Each restaurant employs eight people; one is a manager paid a salary plus a bonus equal to 4 percent of sales. Other employees, two cooks, one dishwasher, and four servers, are paid salaries. Each manager is budgeted $3,000 per month for advertising costs.
Required: Classify each of the following costs incurred by Rachael's Restaurant as fixed, variable, or mixed:
a. Advertising costs relative to the number of customers for a particular restaurant.
b. Rental costs relative to the number of restaurants.
c. Cooks salaries at a particular location relative to the number of customers.
d. Cost of supplies (cups, plates, spoons, etc.) relative to the number of customers.
e. Manager's compensation relative to the number of customers.
f. Servers' salaries relative to the number of restaurants.

Answer 1

Answer:

a. Advertising costs relative to the number of customers for a particular restaurant.   [Fixed]

b. Rental costs relative to the number of restaurants.  [Variable]

c. Cooks salaries at a particular location relative to the number of customers.          [Fixed]

d. Cost of supplies (cups, plates, spoons, etc.) relative to the number of customers.  [Variable]

e. Manager's compensation relative to the number of customers.  [Mixed]

f. Servers' salaries relative to the number of restaurants.  [Variable]

Explanation: