Question

Help Save & Exit Submit Check my work Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $500 and the variable cost per cup of coffee served is $0.78. Required: 1. Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the indicated levels of activity. 2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Complete this question by entering your answers in the tabs below. Required 1 Requirer 2 Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Increase Decrease Remain the same < Required 1 < Prev 1 of 4 !!! Next >

Answer 1

1) Assume Cups of Coffee Served in a Week 1,100,1,200 & 1,300 (a) Fixed Cost Variable cost (S0.78 * a) Total Cost (b) Average cost per cup of coffee served (b)/(a) Cups of Coffee Served in a Week 1,100 1,200 1,300 $500 $500 $500 $858 $936 $1,014 $1,358 $1,436 $1,514 $1.235 $1.197 $1.165 Note: Variable cost (per cup of coffee * Cups of Coffee Served in a Week) 2) Average cost per cup of coffee served decrease as the number of cups of coffee served in a week increases.