COSTING AND PRICING

05 ACTIVITY 1

BIG BURGER RESTAURANT

The owner of Big Burger Restaurant wants to determine the unit cost associated in their
10,000 sales of burger for January 201A. The following variable expenses per burger are
available:

Burger patty P5.50

Bread 2.00
Ketchup 0.50
Lettuce 6.00
Mayonnaise 0.50
Total variable cost per P14.50 per
unit burger

The fixed expenses of Big Burger Restaurant are the following:

Labor P5,500
Rent 2,500
Insurance 500
Advertising 2,000
Utilities 4,800
Total fixed cost P15,300

A. Compute for the unit cost per burger.

SOLUTION:

Unit Cost = Total Variable Cost per unit + Total Fixed Cost___
Total Number of Sales

= P14.50 + P15,300_
10,000
= P14.50 + P1.53

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 = P16.03

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