"No Exceptions

question 76

Multiple Choice

"No exceptions. No excuses." That is Franco's Pizza's motto. Every customer gets a Franco's pizza on time and as it was ordered - no exceptions, no excuses. Ronnie delivers Franco's pizza and is known in the area around Franco's for his reckless driving. "I have to get the pizza to the customers on time." If the pizza is not on time, Ronnie has to pay for it out of his tip money. When Franco is told about Ronnie's driving by the owner of a pet store nearby he responds, "Sorry. That is not who Franco's is. We work hard, but we would never put others at risk." Which of the following is correct about Franco's?

• A) Franco is not responsible for Ronnie's driving because he never instructed him to do that.
• B) Franco's culture is a good one for performance and customer satisfaction.
• C) Franco's mantra has countermanded its culture.
• D) All of the above

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Definitions:

Marginal Cost

The cost incurred by producing one additional unit of a product or service.

Indirect Cost

Expenses not directly tied to the production of goods or services, such as administration, rent, and utilities.

Manufacturing Overhead

This encompasses all the indirect costs associated with the manufacturing process, including utilities, depreciation, and salaries for non-direct labor.

Variable Cost

Costs that vary directly with the level of production or output, such as raw materials and direct labor expenses.