You own a cafe in a large urban area that carries a total of $500,000 per year in Fixed Costs. Your cafe sells only coffee for $2.50 per cup. The average Variable Cost per cup (coffee mix, cup costs, etc.) is $1.a. How many cups of coffee do you need to sell per day to break even? b. If the price of the coffee decreased by 10% for a special promotion (with all other costs staying the same), how many cups would you need to sell per day to break even? (General Account)

You own a cafe in a large urban area that carries a total of $500,000 per year in Fixed Costs. Your cafe sells only coffee for $2.50 per cup. The average Variable Cost per cup (coffee mix, cup costs, etc.) is $1.a. How many cups of coffee do you need to sell per day to break even? b. If the price of the coffee decreased by 10% for a special promotion (with all other costs staying the same), how many cups would you need to sell per day to break even? (General Account)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11E

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