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Now, let's try to break down the various costs business owners have into Fixed Costs and into Variable Costs. You may wa
Posted: Tue Apr 26, 2022 9:54 am
by answerhappygod
- Now Let S Try To Break Down The Various Costs Business Owners Have Into Fixed Costs And Into Variable Costs You May Wa 1 (96.78 KiB) Viewed 43 times
Now, let's try to break down the various costs business owners have into Fixed Costs and into Variable Costs. You may want to re-read the Lecture and/or the textbook to refresh yo memory on this one. Julia owns a sub sandwich shop and has the following costs each month: • Labor costs (management & workers) = $8,000 • Insurance = $900 • Rent - $800 • Utilities = $300 • Average cost of ingredients/packaging for each sub - $1.15 Once you have classified them into FIXED and VARIABLE costs, complete the following: 3. Julia sells subs for $6 each. How many subs will she need to sell to break even each month based on the costs listed above? 4. In order to make that break even number more manageable, Julia has found a new meat and vegetable distributor that can lower the average cost of ingredients/packaging down to $0.95 per sub. If all of the other costs remain the same, what would the new break-even point be? 5. Julia decides to reposition her sub shop as "upscale" with fresher meats and vegetables, along with premium packaging for the subs. Her new price point is $10 per sub, but her variable costs have risen to $4.22 per sub. If all other costs remain the same, what is the break-even point now?