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Subway, the fast-food restaurant franchise, came out with a promotion offering two footlong subs for $10 during the early days of the Covid to drive
Subway, the fast-food restaurant franchise, came out with a promotion offering two footlong subs for $10 during the early days of the Covid to drive traffic to its restaurants. Franchise owners were not happy with the promotion, claiming they lost money on every sub sold. Assume that the costs related to the cost of one Subway footlong sub and the Subway franchisee include the following (assume a selling price of $10/2, or $5 per sub): Suppose your answer for question \#1 was $11.28 in total variable costs per two sub deal. All other costs that are fixed costs are the same as in the table above. If a franchise owner offers this special pricing ($10.00 ) for two subs, how much incremental contribution margin (or loss) will they earn for each deal sold? If your answer is a loss be sure to put a negative sign in front of your answer. Enter your answer to two decimal places. Do not enter a dollar sign. Which costs ARE relevant to this pricing decision? Labor cost Electricity Royalty Fee Franchise Fee Credit Card Fee Equipment Leasing Cost Food Costs Advertising Fee Rent Subway, the fast-food restaurant franchise, came out with a promotion offering two footlong subs for $10 during the early days of the Covid to drive traffic to its restaurants. Franchise owners were not happy with the promotion, claiming they lost money on every sub sold. Assume that the costs related to the cost of one Subway footlong sub and the Subway franchisee include the following (assume a selling price of $10/2, or $5 per sub): Suppose your answer for question \#1 was $11.28 in total variable costs per two sub deal. All other costs that are fixed costs are the same as in the table above. If a franchise owner offers this special pricing ($10.00 ) for two subs, how much incremental contribution margin (or loss) will they earn for each deal sold? If your answer is a loss be sure to put a negative sign in front of your answer. Enter your answer to two decimal places. Do not enter a dollar sign. Which costs ARE relevant to this pricing decision? Labor cost Electricity Royalty Fee Franchise Fee Credit Card Fee Equipment Leasing Cost Food Costs Advertising Fee Rent
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