visit a local fast food restaurant observe all aspects of the operation and take not 544683

Cost Behavior and Contribution Margin

Visit a local fast-food restaurant. Observe all aspects of the operation and take notes on the entire process. Describe the procedures used to take, process, and fill an order and deliver the order to the customer. Based on your observations, make a list of the costs incurred by the operation. Identify at least three variable costs and three fixed costs. Can you identify any potential mixed costs? Why is the restaurant willing to sell a large drink for only a few cents more than a medium drink? How is the restaurant able to offer a “value meal” (e.g., sandwich, drink, and fries) for considerably less than those items would cost if they were bought separately? Bring your notes to class and be prepared to discuss your findings.

Your instructor will divide the class into groups to discuss the case. Summarize your group’s discussion, and ask one member of the group to present the summary to the rest of the class.