Starbucks Corporation sells coffee with the following details:
•Selling price per cup: $5
•Variable cost per cup: $2
•Fixed costs: $500,000
Required:
1.Calculate the break-even point in units and dollars.
2.Determine the number of cups that must be sold to achieve a target profit of $200,000.
3.Discuss how changes in fixed costs would impact the break-even point.