Question

A local coffee shop is hoping to make use of its excess restaurant capacity in the evenings by experimenting with selling beer and wine. It speculates that the only additional costs are hiring more of the same sort of workers to cover the additional hours and costs of the new line of beverages.

Which of the following are examples of hidden costs that are likely to emerge from this decision? Check all that apply.

The cost of landscaping for the outside lawn

The forgone revenues that could be earned by renting the coffee shop out for other events during evening hours

The cost of purchasing wine and beer to serve to customers

The costs involved with the increased usage of utilities, such as electricity and gas, during evening hours

Training costs for new and existing employees on beer and wine serving procedures

Answer 1

The forgone revenues that could be earned by renting the coffee shop out for other events during evening hours
The costs involved with the increased usage of utilities, such as electricity and gas, during evening hours
Training costs for new and existing employees on beer and wine serving procedures

(These three are the examples of hidden costs which the restaurant is not speculating.)