Mid Help Save $1,100 and the variable cost per cup of coffee served is $0.54 1.

Question

Mid Help Save $1,100 and the variable cost per cup of coffee served is $0.54 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 ) 2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served ina week increases? Fill in the following table with your estimates of the company's total cost and average cost per cup of coffee at the levels of activity. (Round off the average cost per cup of coffee to the nearest tenth of a cent.) Cups of Coffee 1,000 1,100

Explanation / Answer

1.

(Average cost per cup of cofee served = Total cost ÷ cups of cofee served in a week)

2. Answer: B) Decrease

The average cost of a cup of coffee declines as the number of cups of coffee served increases because the fixed cost is spread over more cups of coffee.

Cost of Coffee served in a Week 1000 1100 1200 Fixed cost 1100 1100 1100 Variable cost 540 594 648 Total cost 1640 1694 1748 Average cost per cup of coffee served 1.64 1.54 1.46

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