Question: Sub Place, a small sandwich store, is located on a busy corner near many other businesses. The shop's busiest time is during the mid-day
Sub Place, a small sandwich store, is located on a busy corner near many other businesses. The shop's busiest time is during the mid-day period. Rent for the location is $1000 per month, and wages amount to $2000 per month. Variable costs consist of supplies and sandwich ingredients that cost $2.14 per sub sandwich. The subs are to be sold at a price of $5.69 each. Answer each of the following independent questions. (a) How many sandwiches must the shop sell to break even? (b) If the shop increases variable costs by $0.23 per sandwich, how many sandwiches must it sell to break even? (c) If the rent increases by 12%, what would the profit be if the shop sold 1575 units? (d) If the sandwich price was reduced by $0.23, how many sandwiches must the shop sell to make $1082 profit? (a) The shop must sell sandwiches to break even. (Round up to the nearest whole number.)
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To calculate the breakeven point we need to determine the total costs and divide it by the c... View full answer
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