Current Activity level: 5,000 Sandwiches

Food ingredients cost per sandwich: $2.50 per sandwich

1. For each cost item, identify the cost for one footlong sub sandwich and then classify each cost as Variable, Fixed or Mixed in the following table. Relevant range for this location is 3,000 - 8,000 sandwiches per month Assume a current level of activity of of the $5 footlong sandwiches per month Cost Item Details Cost per Sandwich Cost Classification Var, Fixed, Mixed Food ingredients Per footlong Labor cost per footlong Credit card transaction fee Labor $14.00/hour wage rate, each worker makes 7 sandwiches per hour 1.0% + $0.10 per transaction (assume no sales tax and all transactions are credit cards) $360 per month Electricity Rent 1,200 per month Franchise fee amortization Franchise and start up fees $36,000, covers a period of 180 months 8.0% of sales Royalty fee Advertising fee 4.5% of sales Equipment leasing cost $600/month Total cost per $5 footlong sandwich