Tag Archives: product cost

Does each Subway $5 Footlong cost the franchisee more than $5?

Subway, the fast food restaurant franchise, recently announced it is bringing back the “$5 Footlong” promotion. Hundreds of Subway franchise owners are protesting the promotion, saying that they cannot afford to sell the footlong sub sandwiches for $5. Assume that the costs related to a Subway footlong and a Subway franchisee include the following: Cost […]

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What costs are included for a bottle of water at the JFK International airport if activity-based costing (ABC) is used for product costing?

In a recent Wall Street Journal article (“The Price You Pay for Water at the Airport,” Scott McCartney, April 22, 2015), the cost of a bottle at various airports was compared to the cost of that same bottle of water at a convenience store. A 20-ounce bottle of Dasani water typically costs about $0.99 at […]

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