Question

Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,700 and the variable cost per cup of coffee served is $0.72. 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 1Required 2 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. (Round the "Average cost per cup of coffee served" to 3 decimal places.) Cups of Coffee Served in a Week 1,800 1,900 2,000 Fixed cost Variable cost Total cost Average cost per cup of coffee served 0 < Required! Required 2 >

Answer 1

Answer:

1

Fill in the following table with your estimates of total costs and cost per cup of coffee atthe indicated levels of activity for a coffee stand

	Cups of Coffee Served in a Week
	1800	1900	2000
Fixed cost	1700	1700	1700
variable cost	1296	1368	1440
Total Cost	2996	3068	3140
Average cost cup of coffee served	1.66	1.61	1.57

working notes for the above answer is as under

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2

Answer:

The average cost of a cup of coffee declines as the number of cups of coffee served increases because the fixed cost is spread over more cups of coffee