Question

Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,400 and the variable cost per cup of coffee served is $0.54. Required: 1. Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicated levels of activity for a coffee stand. (Round the Average cost per cup of coffee served to 3 decimal places.) Cups of Coffee Served in a Week 2,200 2,300 2,400 Fixed cost Variable cost Total cost Average cost per cup of coffee served $ 0 $ 0 $ 0

Answer 1

Ans.1		Cups of Coffee Served in a week
		2,200	2,300	2,400
	Fixed cost	$1,400	$1,400	$1,400
	Variable cost	$1,188	$1,242	$1,296
	Total cost	$2,588	$2,642	$2,696
	Average Cost Per Cups of Coffee Served	$1.18	$1.15	$1.12
	*Total fixed cost and Variable cost per unit remain constant on each level of activity.
	Total variable cost =   Variable cost per unit * Cups of Coffee Served in a week
	Cups of Coffee Served in a week	2,200	2,300	2,400
	Variable cost	$0.54 *2,200	$0.54 *2,300	$0.54 *2,400
	Average cost per cup of coffee served = Total cost / Cups of Coffee Served in a week
		2,200	2,300	2,400
	Cups of Coffee Served in a week	$2,588 / 2,200	$2,642 / 2,300	$2,696 / 2,400