Starbucks In 1971 in Seattle's Pike Place Market, a small coffee shop opened its doors for the first time. Like most new businesses, it had its share of successes and false starts, but slowly and surely it began to grow. Over the next 20 years the little coffee shop expanded both its menu and its presence in the U.S. Northwest, growing to 116 outlets. In 1991, success led to the stock market and the company "went public" by offering stock on the Nasdaq National Market under the trading symbol "SBUX." Today, we know the Starbucks company as the leading retailer and roaster of specialty coffees in the world with an aim to serve the world's most sustainable coffee. Starbucks employed approximately 238,000 workers in 2018 and welcomed customers into more than 29,000 retail stores in 78 countries. In 2018, Starbucks reported revenue of $24.7 billion (up by 10% from $22.4 billion in 2017), net income of $4.5 billion (up by 56% from $2.9 billion in 2017), and total assets of $24.2 billion (up by 68% from $14.4 billion in 2017). Without question, Starbucks has achieved remarkable success in its nearly 50-year history. In addition to these accounting measures of success, Starbucks succeeds in other ways too. Accolades include being named one of the world's most admired companies (Fortune), one of the most ethical companies (Ethisphere), and one of the most valuable brands (Fortune). How does Starbucks achieve these remarkable results? Undoubtedly, there are many explanations, including the way Starbucks supports key decision makers with appropriate and timely information. This support includes collecting, summarizing, and reporting relevant financial information in a timely manner to intemal managers and extemal decision makers. This is the world of accounting. Discussion Questions 1. As Starbucks expands its growth both domestically and globally, what challenges does it face related to cost estimating? 2. What are examples of fixed and variable costs for Starbucks? 3. In the northwestern corner of the United States, you seemingly find a Starbucks retail store on every street corner. How do you suppose these retailers can stay in business with such close proximity? 4. How might Starbucks overhead costs be allocated? Do you expect one method to be better than the other?