Question

1a. Consider the manager of the home appliance department at a Home Depot store. For this manager, list two costs that are controllable and two costs that are non-controllable. Explain why you consider them controllable or non-controllable costs.

1b. As the manager of a local Olive Gardens restaurant, list two costs that may be considered fixed costs and
two that may be considered variable costs. Explain why you consider them fixed or variable costs and
explain why you as a manager should be concerned that they are correctly categorized.

Answer 1

Solution:

1(a).

Controllable costs :

Reason:

Cost of inventory :

As these can be controlled dependent on assessed interest for every month.

Cost of packing :

As these work in direct extent to stock.

Uncontrollable costs :

Reason:

General advertising cost of store:

As these are embraces for store overall, so can't be controlled by a solitary office.

Cost of supervisor:

As these speak to a changeless worker. Whose administrations can't be ended.

.

1(b).

Variable expense:

Reason:

Cost of supplies:

As these differ with number of customers every day.

Cost of salaries:

As when higher interest is confronted, more workers will be required and when request is relied upon to be low , a few representatives might be layed off.

Fixed cost:

Reason:

Rent:

As these must be paid every month, independent of number of customers.

License fee:

Settled piece of permit expense, that must be paid every year.