Starches Coffee Company is launching a new sustainability initiative that would reward customers for purchasing...
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Starches Coffee Company is launching a new sustainability initiative that would reward customers for purchasing a reusable cup. During the cup promotion, customers would pay an extra $1.00 for the reusable cup and would receive a 20 percent discount each time they return with the cup to buy a cup of coffee. Each week Starcups serves 53,000 customers, who purchase an average of 2.50 cups of coffee per week (132,500 cups total). Starcupss contribution margin income statement for a typical week is shown below: Units Per Unit Total Sales Revenue 132,500 $ 6.60 $ 874,500 Variable Costs 132,500 2.80 371,000 Contribution Margin 132,500 $ 3.80 $ 503,500 Fixed Costs 113,000 Net Operating Income $ 390,500 Assume the new cup promotion is expected to impact
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