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Question 1. What is the cost of goods sold (COGS) for Micah to produce one sandwich? * Hint: the answer is between .45 to .55It takes 2 breads , 1 cheese slice, 1oz butter and 1sqft foil to make the sandwich. So you need to take A) 2 slices of bread+ B) 1 slice of cheese+ C) 1oz butter and D)1sq ft. foil - four things to calculate the COGS for one sandwich. Don't forget to add tax to the price of Aluminum foil. It's (3.98+6%of3.98).
Question 2. What is the markup if Micah charges USD 1 per sandwich? Write the answer in percentage term. Hint: Margin = sales revenue - COGS Example: If a product sells for USD 100 and costs USD 70 to manufacture, the margin is USD 30. Stated as a percentage (as it often is), the margin would be 30%.
Question 3. Taking all costs listed into account, how many sandwiches would Micah need to sell to break even? Don't forget to add tax to the price of griddle. It's (29.90+6%of29.90)Add Griddle + utilities + advertising and raw material (Bread + Cheese + Butter + Aluminum foil with tax)
Question 4. What issues could you see arising for Micah at this point?
Question 5. Which of the identified costs above are fixed costs? Variable costs?
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