Question

Java Joe operates a chain of coffee shops. The company pays rent of $20,000 per year for each shop. Supplies (napkins, bags, and condiments) are purchased as needed. The manager of each shop is paid a salary of $3,000 per month, and all other employees are paid on an hourly basis. Relative to the number of customers for a shop, the cost of supplies is which kind of cost?
1) cost.-fixed
2) cost-variable
3) cost-mixed
4) cost-relevant cost

Answer 1

Answer:

2. Cost-variable.

Explanation:

Variable costs basically depends on the customers in the shop. In this case, the more napkin a person uses, the more Java Joe has to order.