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EXERCISE 14 Fixed and Variable Cost Behavior LOW4 Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense
EXERCISE 14 Fixed and Variable Cost Behavior LOW4 Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.22. Requirect 1. Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the indicated levels of activity. Round off the average cost per cup of coffee to the nearest tenth of a cent. Cups of Coffee Served in a Week ? ? 2,000 2.100 2.200 Fixed cost 1200 ?1700 ?1200 120G Variable cost. ? 400 462 4.84 Total cost. ?16 (182 Average cost per cup of coffee served. >1684 D 022 2. Does the average cost per cup of coffee served increise, decrcase, or remment the same as the number of cups of coffee served in a week increases? Explain. 200.82
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