In Chapter 18, we learn more about cost behavior and a very popular tool in management accounting: Cost-Volume Profit (CVP) Analysis.

Please choose one of the two companies below and answer the required questions:

Option A: Sweetgreen, launched by entrepreneurs Nic, Jon, and Nate, is a fast-casual restaurant brand devoted to healthy salad choices. The company also sells T-shirts, hats, and other apparel.

Option B: FitGym, launched by entrepreneurs Erika and Jamie is a members-only gym offering gym access, classes, and private lessons. The company also sells healthy drinks such as smoothies.

Required

1. Identify several of the variable, mixed, and fixed costs (at least two each) that the company is likely to incur in operating its business.

2. The firm is expanding. How could overly optimistic sales estimates potentially hurt its business?

3. Explain how cost-volume-profit analysis can help the owners manage the company. Discuss at least two specific decisions (situations) in which CVP analysis would prove valuable.

As in the previous weeks, your posting should consist of at least 300 words.