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Gut Bombs sandwich shop pays $5,000 a month in rent space and equipment. It pays each of it 10 workers $2,500 a month and spends $5,000 on food. There are no other production costs. Usually the shop sells 3,500 sandwiches per month for $10 each.Their average fixed cost per month per sandwich, rounded to the nearest penny, is

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facundobuzzetti

Answer:

Average fixed cost= $1.43

Explanation:

Giving the following information:

Production costs:

Rent= $5,000

Direct labor= $2,500

Direct material= $5,000

Usually, the direct labor cost is variable. In some conditions, it is a fixed cost. We will consider it as a variable cost.

Total fixed cost= 5,000

Average fixed cost= 5,000/3,500

Average fixed cost= $1.43

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