Question

"Coffee Klatch is an espresso stand in a downton office building. The average selling price of a cup of coffee is $1.49 and the avergage variable expense per cup is $0.36. The avergage fixed expense per month is $1,300. How many cups of coffee would have to be sold to attain target profits of $2,500 per month?"

Answer 1

3363 cups of coffee

Step-by-step explanation:

Given that the average selling price of a cup of coffee is $1.49 and the avergage variable expense per cup is $0.36 and average fixed expense per month is $1,300

The target profit is the difference between the total selling price and the total cost.

Let the number of units to be sold to make a target profits of $2,500 be T

The total cost will be

= 0.36T + 1300

The total sales

= 1.49T

Hence

1.49T - 0.36T - 1300 = 2500

1.13T = 2500 + 1300

1.13T = 3800

T = 3800/1.13

= 3362.83

Hence the company must sell about 3363 cups of coffee to make the target profit