|
TAKING CARE OF BUSINESS
How much would it cost to run a submarine
sandwich shop in your community? Look through the classified or real-estate
advertisements in your local newspaper and identify a building that could
be rented. Find the cost of rolls , meat, cheese, lettuce, and so
forth that would be needed per sandwich. (For help in determining
prices, visit your local supermarket, or use the supermarket ads in the
weekly food edition of the local newspaper.) Determine what you would
have to pay your help (two workers at all times). Assume you sell
200 submarine sandwiches per day when you stay open from 10:00 AM to 8:00
PM. Write this information in the column at the left below.
Then answer the questions that follow.
Costs of Running a Submarine Sandwich
Shop
| ITEM |
COST PER DAY |
FIXED OR VARIABLE? |
| Soft Drink? |
$________ |
________ |
Rent per day (monthly rent= $______,
daily rent = $______(divide by 30) |
$________ |
________ |
| Cost of 200 rolls |
$________ |
________ |
| Cost of 200 bags and napkins |
$________ |
________ |
Cost of employees (local wage =
$____per hour, daily wages =
$____x 10 hours x 2 workers,
add 20% for fringe benefits) |
$________ |
________ |
Cost of insurance per day
($240/month) |
$________ |
________ |
| Utilities ($360/month) |
$________ |
________ |
| Other costs |
$_20_____ |
________ |
| TOTAL |
$_______ |
________ |
1. How much would you need to charge
per sandwich to earn 5 percent return on your sales?
To find the answer,
proceed as follows:
-
Multiply total costs times 1.05 to find the
amount you must take in from sales.
_________________ x 1.05 = _________________
-
Divide the amount you must take in by 200
sandwiches, and you have the price you must charger per sandwich.
_________________ divided by 200 = ______________ (price)
2. In the fixed-or-variable column,
write F for fixed costs and V for variable costs.
3. Should you sell soft drinks or
other products in your submarine sandwich shop? To help you decide,
indicate whether costs would change if soft drinks were offered for sale
by writing yes or no in the appropriate place in the "Soft
Drink?" column.
©
National Council on Economic Education, New York, NY
Entrepreneurship in the U.S. Economy, Lesson 20
Entreprenuers Control Costs: Economics Lesson
|