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Question 1: Score 0/4 Your response Exercise 5-1 Fixed and Variable Cost Behavior [LO1] Espresso Express operates a number of espresso coffee stands in busy suburban fixed weekly expense of a coffee stand is $1,200 and the variable cost per cu served is $0.22. Requirement 1: Fill in the following table with your estimates of total costs and cost per cup of c indicated levels of activity for a coffee stand. (Round average cost per cup of decimal places. Omit the "$" sign in your response.) Cups of Coffee Served in a Week 2,000 2,100 2,200 Fixed cost $ 0.60 (0%) $ 0.571 Variable cost 0.22 (0%) 0.22 Total cost $ 0.82 (0%) $ 0.791 Average cost per cup of coffee served $ 0.792 (0%) $ 0.792 Total grade: 0.01/12 + 0.01/12 + 0.01/12 + 0.01/12 + 0.01/12 + 0.01/12 + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% + 0% Feedback: Average cost per cup of coffee served = Total cost cups of coffee served in a we Requirement 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? Your Answer: Choice Selected Correct Increases Decreases Remains the same Feedback: 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. Question 2: Score 0/4 Your response Correct response Exercise 6-2 Prepare a Cost-Volume-Profit (CVP) Graph [LO2] Karlik Enterprises distributes a single product whose selling price is $24 and whose variable expense is $18 per unit. The company's monthly fixed expense is $24,000. Requirement 1: Offline: Prepare a cost-volume-profit graph for the company up to a sales level of 8,000 units. Requirement 2: Estimate the company's break-even point in unit sales using your cost-volume-profit graph analysis. Break-even point in sales 16.67 (0%)units Exercise 6-2 Prepare a Cost-Volume-Profit (CVP) Graph [LO2] Karlik Enterprises distributes a single product whose selling price is $24 and whose variable expense is $18 per unit. The company's monthly fixed expense is $24,000. Requirement 1: Offline: Prepare a cost-volume-profit graph for the company up to a sales level of 8,000 units. Requirement 2: Estimate the company's break-even point in unit sales using your cost-volume-profit graph analysis. Break-even point in sales 4,000 units Total grade: 0.01/1 = 0% Feedback: The break-even point is the point where the total sales revenue and the total expense lines intersect. This occurs at sales of 4,000 units. This can be verified as follows: Question 3: Score 2.6/4 Your response Exercise 5-3 High-Low Method [LO3] The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer.... View Full Document

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