Homework Chapter Exercise 14 Fixed and Variable Cost Behavio

Homework. Chapter Exercise 1-4 Fixed and Variable Cost Behavior [LO1-4] Express operates a number of espresso coffee stands in busy suburban mals The fixed weekly expense of a coffee stand is 20 $2,000 and the variwble cost per cup of coffee served is S0.46 tFa-te tlong tatie wm yourestmates ofre companytotal cost and average cost per cup of cofee at the 2 Does te average cost cup of cenee served increase, decrease, or remain the same as the number of cups of coffee served n a Complete this question by entering your answers in the tabs bellow oes the average cost per cup of coffee served ncrease, decrease, or reman the same as the number of oups of coee r li Score answer ) 20 40 Fo

Solution

1).

1000*0.46

= $460

1100*0.46

= $506

1200*0.46

= $552

Average Cost Per Coffee Served

(Total Cost / Cups of coffee served in a week)

2). If number of cups of coffee served increase then average cost of per cup of coffee served Decreases.

Cups of Coffee Served in a Week =>(Estimated)	1000	1100	1200
Fixed Cost	$2000	$2000	$2000
Variable Costs ($0.46 per cup)	1000*0.46 = $460	1100*0.46 = $506	1200*0.46 = $552
Total Cost (Fixed + Variable Costs)	$2460	$2506	$2552
Average Cost Per Coffee Served (Total Cost / Cups of coffee served in a week)	$2.46	$2.278	$2.127