Question

What are some examples of Implicit variable cost and Implicit fixed cost for Starbucks?

Answer 1

: Variable costs refer to the costs that Starbucks incurs in the process of making coffee. The main variable costs are raw materials (coffee beans, plastic cups, etc.) and labor costs (e.g. barista salaries). To a large extent, Starbucks has control over their variable costs. For instance, if Starbucks management decided that they wanted to caffeinate consumers less, they can make your Latte with fewer coffee beans, thereby lowering their variablecosts.

: Aside from variable costs, Starbucks must incur fixed costs, which are the expenses they pay whether they make coffee or open their doors or not. For example, if Starbucks does not sell one cup of coffee, they still have to pay store ren