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5. Rio Coffee Shoppe sells two coffee drinks, a regular coffee and a latte. The two drinks have the following prices and cost characteristics: Regular
5. Rio Coffee Shoppe sells two coffee drinks, a regular coffee and a latte. The two drinks have the following prices and cost characteristics:
Regular Coffee | Latte | |||||
Sales price (per cup) | $ | 1.60 | $ | 2.50 | ||
Variable costs (per cup) | 0.70 | 1.10 | ||||
The monthly fixed costs at Rio are $7,300. Based on experience, the manager at Rio knows that the store sells 80 percent regular coffee and 20 percent lattes.
Required:
How many cups of regular coffee and lattes must Rio sell every month to break even?
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