$\backslash$table$[[$Cost item,Details,Cost per sub$],[$Food ingredients,$\backslash$table$[[$Per footlong average $($Turkey sub food cost $=$$$1\mathrm{.}80$;$],[$Roast beef sub food cost $=$$$2\mathrm{.}84)]],$$$,2\mathrm{.}32],[$Labor cost per sub,$\backslash$table$[[$Labor $$\frac{16\mathrm{.}00}{?}$ hour wage rate, each worker can$],[$make $8$ subs per hour$]],,2\mathrm{.}00],[$Credit card transaction fee,$1\mathrm{.}0\%$ of sales price,,$0\mathrm{.}05],[$Electricity$,$$$400$ per month divided by $4,000$ orders per month,,$0\mathrm{.}10],[$Rent$,\backslash$table$[[$Rent $$1,600$ per month divided by $4,000$ orders per$],[$month$]],,0\mathrm{.}40],[$Franchise fee amortization,$\backslash$table$[[$Franchise and startup fees $$43,200$ divided by $180],[$months $(15$ years $ ivided by $4,000$ orders per$],[$month$]],,0\mathrm{.}06],[\backslash$table$[[$Royalty fee $($paid to$],[$Subway as a franchise fee$)]],9\mathrm{.}0\%$ of sales,,$0\mathrm{.}45],[\backslash$table$[[$Advertising fee $($paid to$],[$Subway as a franchise fee$)]],6\%$ of sales,,$0\mathrm{.}30],[$Equipment leasing cost,$$800$ per month divided by $4,000$ orders,,$0\mathrm{.}20],[$Cost per sub,,$$,5\mathrm{.}88]]$

Assume a selling price of $$10/2,$ or $$5.$

$1.$ Identify each of the coste as either fixed or variable.

$2.$ What costs and facts do you think should be relevant to the footlong sub pricing decision? Why?

$3.$ What is the variable cost of each $$10$ footlong sub combo sold?

$4.$ Do you agree that Subway would lose money for two footlong subs sold at $$10?$ Why or why not??