Rio Coffee Shoppe sells two coffee drinks - a regular coffee and a latte. The two drinks have the following prices and cost characteristics: Regular Coffee Latte Sales price (per cup) $1.60 $2.80 Variable costs (per cup) .70 1.60 The monthly fixed costs at Rio are $7,128. Based on experience, the manager at Rio Knows that the store sells 70 percent regular coffee and 30 percent lattes Required How many cups of regular coffee and lattes must Rio sell every month to break even? Break-even sales in units Regular coffee ___________ Lattes ___________
Rio Coffee Shoppe sells two coffee drinks - a regular coffee and a latte. The two drinks have the following prices and cost characteristics:
Regular Coffee Latte
Sales price (per cup) $1.60 $2.80
Variable costs (per cup) .70 1.60
The monthly fixed costs at Rio are $7,128. Based on experience, the manager at Rio Knows that the store sells 70 percent regular coffee and 30 percent lattes
Required
How many cups of regular coffee and lattes must Rio sell every month to break even?
Break-even sales in units
Regular coffee ___________
Lattes ____________
The Break-even point refers to the point at which the company is earning no profit or loss and total cost and revenue are equal at this level. It is the level of production at which revenue and cost of production for products are equal.
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