In: Finance
If you operated for 325 days/year, assuming 50 burgers sold/day; VC = $3.50; FC = $65.3K/year; and SP = $7.00, your total cost per burger would be?
Select one:
a. $7.09
b. $7.15
c. $7.52
Number of burgers sold in a year = Sales per day x Number of days operated in a year
= 50 x 325 = 16,250
Fixed cost per burger = Total annual fixed cost/ Number of burgers sold
= $ 65,300/16,250 = $ 4.018462 or $ 4.02
Variable cost per burger = $ 3.50
Total cost per burger = Fixed cost + Variable cost
= $ 4.02 + $ 3.50 = $ 7.52
Hence option “c. $ 7.52” is correct answer.