Koffee express operates a number of espresso coffee stands

Reference no: EM13585875

Fixed and variable cost behavior

Koffee Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,100 and the variable cost per cup of coffee served is $.26.

Required:

1.Fill in the following table with your estimates of total costs and average costs per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.

Does the average cost per cup served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Explain.

Cups of Coffee Served in a Week
2,000 1,800 1,900
Fixed Cost	?	?	?
Variable costs	?	?	?
Total cost	?	?	?
Average cost per cup of coffee served	?	?	?

2. Does the average cost per cup served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Explain.

Reference no: EM13585875

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