Question

In: Finance

If you operated for 325 days/year, assuming 50 burgers sold/day; VC = $3.50; FC = $65.3K/year;...

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

Solutions

Expert Solution

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.

jeff jeffy answered 10 months ago
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