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 $ 1.60 0.70 Latte Sales price (per cup) Variable costs (per cup) $ 2.60 1.70 The monthly fixed costs at Rio are $6,300. Based on experience, the manager at Rio knows that the store sells 60 percent regular coffee and 40 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 $ 1.60 0.70 Latte Sales price (per cup) Variable costs (per cup) $ 2.60 1.70 The monthly fixed costs at Rio are $6,300. Based on experience, the manager at Rio knows that the store sells 60 percent regular coffee and 40 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
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text: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
$ 1.60
0.70
Latte
$ 2.60
Sales price (per cup)
Variable costs (per cup)
1.70
The monthly fixed costs at Rio are $6,300. Based on experience, the manager at Rio knows that the store sells 60 percent regular coffee and 40 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
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Difficulty: 2 Medium
Learning Objective: 03-04 Incorporate taxes, multiple products, and alternative cost
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