Question - A university's meal plan for students provides that 40% of a student's meal fee is made available to the student to purchase food at "cost." At the end of the term, the student receives a refund for any of this amount that has not been spent. The other 60% of the meal fee is retained by the food service operation.
a. What is the cost behavior pattern assumed for the food consumed by the student?
b. What is the cost behavior pattern assumed for the 60% of the meal fee retained by the food service operation?
c. Give an example of three costs that are probably included in the cost behavior classification you identified in part b.
d. Is this meal plan more equitable to students than one in which all of the meal fee is retained by the food service operation, and students can eat as much as they want? Explain your answer.