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.
1. Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.
|
2,000 |
2,100 |
2,200 |
| Fixed cost |
? |
? |
? |
| Variable cost |
? |
? |
? |
| Total cost |
? |
? |
? |
Cost per cup of coffeeserved: ? ? ?
2. Does the cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increase? Explain.