Rio Coffee Shoppe sells two coffee drinks—a regular coffee and a latte. The two drinks have the following prices and cost characteristics:The monthly fixed costs at Rio are $9,176. Based on experience, the manager at Rio knows that the store sells 70 percent regular coffee and 30 percent lattes.Required:How many cups of regular coffee and lattes must Rio sell every month to break even? Regular Coffee$ 1.90LatteSales price (per cup)Variable costs (per cup)$ 2.200.601.10The monthly fixed costs at Rio are $9,176. Based on experience, the manager at Rio knows that the store sells 70 percent regularcoffee and 30 percent lattes.Required:How many cups of regular coffee and lattes must Rio sell every month to break even?Break-evenSales in UnitsRegular coffeeLattes

A situation where an entity is having no gain and no loss is break-even.

Answered: Rio Coffee Shoppe sells two coffee…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Rio Coffee Shoppe sells two coffee drinks—a regular coffee and a latte. The two drinks have the following prices and cost characteristics:

The monthly fixed costs at Rio are $9,176. 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?

Regular Coffee
$ 1.90
Latte
Sales price (per cup)
Variable costs (per cup)
$ 2.20
0.60
1.10
The monthly fixed costs at Rio are $9,176. 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

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