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Elodia [21]
3 years ago
15

Koffee Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is

$1,100 and the variable cost per cup of coffee served is $0.26.
Required:

1. Fill in the following table with your estimates of total costs and average cost per cup of coffee at the indicated levels of activity for a coffee stand.

Cups of Coffee Served in a Week 1,800 1,900 2,000
Fixed Cost
Variable Cost
Total Cost Average cost per cup of coffee served
2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Explain
Business
1 answer:
sergey [27]3 years ago
7 0

Answer:

1.

* Number of Cups of coffee served in a week is 1,800:

Fixed cost: $1,100

Variable cost: $0.26

Total cost average cost per cup: $0.87 ( which is calculated as Total Fixed cost/Total of cups served + Variable cost per unit = 1,100/1,800 + 0.26)

* Number of Cups of coffee served in a week is 1,900:

Fixed cost: $1,100

Variable cost: $0.26

Total cost average cost per cup: $0.84 ( which is calculated as Total Fixed cost/Total of cups served + Variable cost per unit = 1,100/1,900 + 0.26)

* Number of Cups of coffee served in a week is 2,000:

Fixed cost: $1,100

Variable cost: $0.26

Total cost average cost per cup: $0.81 ( which is calculated as Total Fixed cost/Total of cups served + Variable cost per unit = 1,100/2,000 + 0.26)

2.

The average cost per cup of coffee served decreases as the number of cups of coffee served in a week increases.

This is because average cost per cup of coffee served is equal to the sum of allocated fixed cost to one cup of coffee + variable cost of one cup of coffee. Although the variable cost of one cup of coffee remains the same given changes in the number of cups served, the allocated fixed cost to one cup of coffee decreases as the cups served increases as Total fixed cost remained the same, yet it will be allocated to more cup served, so the amount allocated to one cup served will decreases.

A formula will make it easy to understand:

Average cost per cup of coffee served = Variable Cost + Total Fixed cost/Total of cups served. Variable cost and total fixed cost remains the same with the variation of number of cup served; thus as number of cups served increases, Average cost per cup of coffee served decreases.

Explanation:

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Answer:

B) Joint Venture

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Joint venture is a kind of business arrangement where two firms merge which includes combining resources and ideas to enhance productivity. Another scope under the topic, joint venture is the  international joint venture. This type of business partnership involved firms from different countries, combining resources and ideas to enhance productivity. This happens when a firm attaches itself to a foreign firm in another country of its interest, to mix up on expertise and other essentials to develop their outputs.

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Answer:

Explanation:

I think it is d

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Ethan uses the cash method of accounting and a calendar year. ethan received a check from a client on december 26, 2016. he didn
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Beranek Corp has $720,000 of assets, and it uses no debt--it is financed only with common equity. The new CFO wants to employ en
Andrej [43]

Answer:

Beranek Corp. should borrow $288,000 to achieve the target debt ratio.

Explanation:

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4 0
3 years ago
145. A mutual fund manager has a $40 million portfolio with a beta of 1.00. The risk-free rate is 4.25%, and the market risk pre
denpristay [2]

Answer:

1.763

Explanation:

Data provided in the question:

Beta of $40 million portfolio = 1

Risk-free rate = 4.25%

Market risk premium = 6.00%

Expected return = 13.00%

Now,

Expected return = Risk-free rate + ( Beta × Market risk premium )

13.00% = 4.25% + ( Beta × 6.00% )

or

Beta × 6.00% = 8.75%

or

Beta = 1.458

Now,

Beta of the total profile should be equal to 1.458

Thus,

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= 0.4

Weight of $60 million portfolio = $60 million ÷ [ $40 million + $60 million]

= 0.6

therefore,

the average beta

1.458 = 0.4 × 1 + 0.6 × ( Beta of $60 million portfolio )

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