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?

Fixed cost per units= $2.14

Explanation:

Giving the following information:

Rent= $5,000

Direct labor= $2,500

Usually, direct labor is a variable cost that varies with production. In this case, I will consider it a fixed cost.

First, we need to calculate the total fixed costs:

Total fixed cost= 5,000 + 2,5000= 7,500

Now, the fixed cost per unit:

Fixed cost per units= 7,500/3,500

Fixed cost per units= $2.14

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.