Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
1. Are Kiosks a fixed or a variable cost?
A kiosk is a fixed cost because the cost remains constant regardless of how much business the
store changes. Thus, the cost of the kiosk does not change in total despite changes in volume.
The only costs are the initial start up and installation, maintenance, and persistent overhead
costs such as electricity.
2. Would a Panera’s employee taking orders at the counter be considered to be a fixed cost or a
variable cost?
A Panera employee taking orders at the counter would be considered a variable cost. When a
store is predicted to have a larger volume of customers, more employees are scheduled to work.
When the store is predicted to have less business, fewer employees are scheduled to work.
Paying these employees is also variable because it depends on their hourly wage, and how many
hours they work per shift, which is subject to change each time they come into work.
3. How does the change to using kiosks to take orders rather than using employees to take
orders change Panera’s breakeven point?
An increase in the company’s fixed costs through adding a kiosk would increase the breakeven
point because a larger volume of sales would be needed to achieve profit. However, decreasing
the variable costs of eliminating employees would decrease the breakeven point. This is due to
an increase in the unit contribution margin. Thus a smaller volume of sales would need to
achieve profit for a decrease in variable costs. Assuming that the variable cost will decrease by a
larger amount than the fixed costs increasing, Panera’s breakeven point would decrease, and
less volume would be needed to create profit.
