Sue, of Sue\'s Sandwiches, sells sandwiches and soda from a sidewalk cart in a p

Question

Sue, of Sue's Sandwiches, sells sandwiches and soda from a sidewalk cart in a popular park near her home. She sets up her rented cart in the summers to raise money for college. Last month she sold $2,780 worth of product (sandwiches and sodas) to 500 customers. She spent $548 on the sandwich ingredients and buying the sodas wholesale. Her monthly costs are the following: Utilities = $85, Salary = $1350, Advertising = $10, Insurance = $35, Interest = $0, Rent = $200, Depreciation = $0.
a. What are Sue's variable costs? Explain.

b. What is Sue's COGS? Explain.

c. What are her fixed costs? Explain.

d. What is Sue's EOU?

e. How much cash reserve should she keep in the bank?

Explanation / Answer

a. Sue's variable costs =$548 b. COGS = $548 c. fixed costs = 85+1350+10+35+0+200+0 =$1680

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