This

**preview**has**blurred**sections. Sign up to view the full version! View Full DocumentQuestion 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

This is the end of the preview. Sign up to
access the rest of the document.