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Rio Coffee Shoppe sells two coffee drinks, a regular coffee and a latte. The two...

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Question

Accounting

Rio Coffee Shoppe sells two coffee drinks, a regular coffee and a latte. The two drinks have the following prices and cost characteristics:

Regular Coffee Latte
Sales price (per cup) $ 1.40 $ 2.50
Variable costs (per cup) 0.80 1.20

The monthly fixed costs at Rio are $4,810. Based on experience, the manager at Rio knows that the store sells 80 percent regular coffee and 20 percent lattes.

Required:

How many cups of regular coffee and lattes must Rio sell every month to break even?

Regular:

Latte:

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