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Question & Answer: Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $700 and the…..

Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $700 and the variable cost per cup of coffee served is $0.32. 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 2,300 2,400 2,500 Fixed cost Variable cost Total cost Average cost per cup of coffee served

Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $700 and the variable cost per cup of coffee served is $0.32. 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.)

Expert Answer

2300 2400 2500
Fixed cost $700 $700 $700
Variable cost (0.32*2300)=$736 (0.32*2400)=$768 (0.32*2500)=$800
Total cost $1436 $1468 $1500
Average cost per cup of coffee served(Total cost/cups of coffee) (1436/2300)=0.624 (1468/2400)=0.612 (1500/2500)=0.6.
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