(Exercise 1-9) Zoya Arbiser, regional manager of Gold Medal Sports Shops, is reviewing the results of 15 stores in her region. Store managers are moved annually. Each store manager’s income is very dependent on the direct contribution margin of that store. For the past year, Store 9 has been managed by a person who has operated several other profitable stores in recent years and is about to be promoted to a larger store. Zoya notices several items that bother her.
(Chapter 1 Discussion Question 9(a)) Controller, Judy Koch, in a recent speech said, “I rarely see a real variable cost or a truly fixed cost.” What did she mean? Include in your response an explanation of the difference in behavior of variable and fixed cost, including an example to illustrate your explanation. Your initial post should be 200 to 250 words.