1. Jim-Bob's Bar-B-Q is planning to open a new pit-style barbeque take-out-only restaurant near the football stadium. They will sell only one product: a pulled-meat sandwich. Annual fixed costs are $100,000; the average variable cost per sandwich is $2.

1. If Jim Bob expects to sell 12,000 sandwiches per year, calculate the average total cost per sandwich.
2. Calculate the break-even price per sandwich if Jim Bob only sells 7,333 sandwiches per year.
3. Suppose instead that the most Jim Bob can charge for a sandwich is $7.50. How many sandwiches must he sell in order to break even?

Answer rating: 100% (QA)

1 Calculate the Average Total Cost per Sandwich Average Total Cost Total Fixed Costs Variable Cost p... View the full answer