Friendly Skies Travel is a travel agency that has branches in many major shopping centres. A typical branch employs five full-time staff: a manager and four customer service staff. Casual customer service staff is called in for periods of high demand and are normally employed for three-hour shifts. Customer service staff book flights for customers on most major airlines. These staff also assists in identifying accommodation and rental car options for customers.
1. Prepare a list of five major costs likely to be incurred by Friendly Skies Travel.
2. For each cost, suggest a possible cost driver that could be used to estimate cost functions and predict cost behaviour.
3. Haying identified these cost drivers, describe the cost behaviour pattern that you would expect for each cost, giving your reasons.