Question

Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $2,400 and the variable cost per cup of coffee served is $0.63.

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?

Fixed cost $ Cups of Coffee Served in a Week 1,200 1,300 2,400 $ 2,400 $ 756 3,156 $ 3,219 $ 2.630 1,400 2,400 882 3,282 Variable cost 819 Total cost Average cost per cup of coffee served $ $

Answer 1

Answer
	1200	1300	1400
Fixed costs	$     2,400	$     2,400	$     2,400
Variable costs( Uits*0.63)	$        756	$        819	$        882
Total costs ( Fixed + Variable)	$     3,156	$     3,219	$     3,282
Average cost(Total cost/Cups of coffee served)	$     2.630	$     2.476	$     2.344
2) Average cost per cup of coffee served Decrease

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