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Starcups Coffee Company is launching a new sustainability initiative that would reward customers for purchasing...

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Accounting

Starcups 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 25 percent discount each time they return with the cup to buy a cup of coffee.
Each week Starcups serves 40,000 customers who purchase an average of 2.5 cups of coffee per week (100,000 cups total). Starcupss contribution margin income statement for a typical week is shown below:

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