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Rio Coffee Shoppe sells two coffee drinks, a regular coffee and a latte. The two drinks...

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 $ 2.30 Variable costs (per cup) 0.60 1.20 The monthly fixed costs at Rio are $7,446. Based on experience, the manager at Rio knows that the store sells 80 percent regular coffee and 20 percent lattes.

Required: How many cups of regular coffee and lattes must Rio sell every month to break even?

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Break even point is a situation where there is no profit no loss for the firm at that point.Particular Selling price VC contribution(A) % of sale proportion(B) Total Contribution(A*B) Total Contribution of Both Products/Unit- regular coffee lattle 2.3 1.2 1.1 0.2 0.22 0.6 0.8 0.8 1.02 Fixed cost $7446 Break Even Point(Units)- Fixed Cost Contrbution/Unit BEP- 7446 1.02 BEP 7300 So 80% sell be of regular coffee & 20% be of lattee Regular coffee sale (Cups)- Lattee Sale(Cups)- 5840 1460

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