Chapter 2. Cost Terminology and Cost Behaviors E2-3 (effects of fixed and variable costs) Joes's Coffee shop sells coffee by the cup. Variable costs are $.2 per cup and fixed costs are $1,200 per month. Shown in Table 1 is a month cost schedule for Joe's. Required: Table 1 --- Monthly cost schedule Activity Total fixed level cost 2,000 cups 4,000 cups Total Fixed cost Variable Total cost variable cost per cup cost per cup per cup 6,000 cups *Total variable costs = (Variable cost per cup) x (cups sold) a. Complete the monthly cost schedule in Table 1. b. Draw below the cost/volume graphs for (a) total fixed cost, (b) total variable cost, (c) per-unit fixed cost, and (d) per-unit variable cost. Show dollars on the vertical axis and volume (or activity level) on the horizontal axis. $ Total fixed cost $ Total variable cost Volume Volume $ Per-unit fixed cost $ Per-unit variable cost Volume Volume c. Using words, characterize how each of these cost numbers changes as volume increases. Total fixed Total variable Per-unit fixed Per-unit variable