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Rosso Coffee House sells three types of drinks: brewed coffee, iced drinks and smoothies. The sales mix is noted below: Coffee Iced Drinks Smoothies Sales
Rosso Coffee House sells three types of drinks: brewed coffee, iced drinks and smoothies. The sales mix is noted below: Coffee Iced Drinks Smoothies Sales Mix 60% 25% 15% Selling Price $ 3.25 $ 6.25 $ 7.50 Variable Cost $ 1.45 $ 4.00 $ 4.25 Contribution Margin ($) $ 1.80 $ 2.25 $ 3.25 CM ratio 55% 36% 43% What is the total weighted average contribution margin ratio? (If your answer is 10%, enter it as 10. Do not enter any symbols, e.g. $, round your calculation to the nearest whole number e.g. 5 (no decimals)) Answer: Assume that break-even in sales dollars is $50,000. How many cups of Iced Drinks will need to be sold at the break- even level of sales dollars. (Do not enter any symbols, e.g. 5, round your calculations to the nearest whole number, e.g. 5 (no decimals)) Answer: c) If Rosso eliminated their Iced drink line and all of those customers purchase coffee instead, what would happen to the weighted average contribution margin? Would it increase or decrease from your answer in part a? The weighted average contribution margin would
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