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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:
0.0×1/12 + 0.0×1/12 + 0.0×1/12 + 0.0×1/12 + 0.0×1/12 + 0.0×1/12
+ 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

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:
0.0×1/1 = 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.
Mon

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