Mr Ha is interested in setting up a coffee shop in Canberra, Australia. After consulting with...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Mr Ha is interested in setting up a coffee shop in Canberra, Australia. After consulting with his brother who owns a café in other town of the territory, he has decided to commence the business in March 2023. The following is relevant information for the business he plans. Initial investment required (coffee stand; $9,000, Coffee machine: 3,000 The machine can be functional for 5 years or a total capacity to produce 50,000 cups of coffee. Rental expense costs the shop $1,000/month for 5 years. The planed price for the coffee is $4/cup and a total variable cost $1.5 every cup. Required a) Define the meaning of fixed costs and variable costs of a company. (6 marks) (10 marks) b) Calculate the total fixed costs every month. c) Calculate the unit contribution margin and explain what the meaning of this information in business is. (10 marks) d) How many cups of coffee need to be sold to achieve a break-even point. (10 marks) Mr Ha is interested in setting up a coffee shop in Canberra, Australia. After consulting with his brother who owns a café in other town of the territory, he has decided to commence the business in March 2023. The following is relevant information for the business he plans. Initial investment required (coffee stand; $9,000, Coffee machine: 3,000 The machine can be functional for 5 years or a total capacity to produce 50,000 cups of coffee. Rental expense costs the shop $1,000/month for 5 years. The planed price for the coffee is $4/cup and a total variable cost $1.5 every cup. Required a) Define the meaning of fixed costs and variable costs of a company. (6 marks) (10 marks) b) Calculate the total fixed costs every month. c) Calculate the unit contribution margin and explain what the meaning of this information in business is. (10 marks) d) How many cups of coffee need to be sold to achieve a break-even point. (10 marks)
Expert Answer:
Answer rating: 100% (QA)
a Fixed costs refer to expenses that do not change with the level of production or sales volume These costs are incurred regardless of the level of ac... View the full answer
Related Book For
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman
Posted Date:
Students also viewed these accounting questions
-
Bruno is a creative flower arrangement specialist that has worked for years in a high- end florist shop in Rosedale neighborhood in Toronto. The commute to his place of work takes more than 2 hours...
-
After graduating from business school, George Clark went to work for a Big Six accounting firm in San Francisco. Because his hobby has always been wine making, when he had the opportunity a few years...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Why is it fundamentally important that costs are correctly classified as either a product cost or a period cost? What is the financial outcome if costs are misclassified?
-
Repeat Problem 22.45, hut now let the outer shell have charge -2q. As in Problem 22.45, the inner shell has charge +2q.
-
Using atomic weight, crystal structure, and atomic radius data tabulated inside the front cover, compute the theoretical densities of lead, chromium, copper, and cobalt, and then compare these values...
-
Use the data in Exercise 24 in Section 13.1 for the following. a. Compute a point estimate for the mean auditory response time for subjects with a visual response time of 200. b. Construct a 99%...
-
Refer to the financial statements for Castile Products, Inc., in Exercise 16-7. Assets at the beginning of the year totaled $280,000, and the stockholders equity totaled $161,600. Required: Compute...
-
A coupon bond has a face value of $1,000.with a 4.83% coupon rate. It matures in 7 years and has a yield to maturity of 7.33%. What is the price of the bond?
-
A partial adjusted trial balance of Manumaleuna Company at January 31, 2012, shows the following. InstructionsAnswer the following questions, assuming the year begins January 1.(a) If the amount in...
-
Alberta Blue Cross has a maximum days supply of maintenance medication. This may be extended to 200 days under what circumstances?
-
Briefly describe the major third-party payers.
-
Successful consultative salespeople focus a great deal of attention on needs awareness, which is the first step on the buying process model. What is the role of salespeople at this stage of the...
-
Which of the following most likely contributes to a current account deficit? A. High taxes B. Low private savings C. Low private investment
-
Briefly describe the impact of healthcare reform on payments to providers.
-
Why do not-for-profit businesses need to make a profit?
-
Shown below is the sales forecast of Buddy Trading for the last quarter of 200C. Units October 12,000 November 11,000 December 36,000 The inventory of merchandise on October 1 was 3,000 units. Sales...
-
A heat engine has a heat input of 3 Ã 104 Btu/h and a thermal efficiency of 40 percent. Calculate the power it will produce, in hp. Source 3 x 10 Btu/h 40% HE Sink
-
On May 9, 2019, Glenna purchases 500 shares of Ignaz Company stock for $7,500. On June 30, 2019, she writes a call option on the stock, giving the grantee the right to buy the stock for $9,000 during...
-
A large part of tax research consists of determining what?
-
Tobias is a 50% member in Solomon LLC, which does not invest in real estate. On January 1, Tobiass adjusted basis for his LLC interest is $130,000, and his at-risk amount is $105,000. His share of...
-
Consider four components of U.S. monthly industrial production index from January 1947 to December 2012 for 792 data points. The four components are durable consumer goods (IPDCONGD), nondurable...
-
Consider the monthly unemployment rates of the States of Illinois, Michigan, and Ohio of the United States from January 1976 to November 2009. The data were seasonally adjusted and are available from...
-
Consider, again, the \(z_{t}\) series of Problem 6. The time plots show the existence of possible aberrant observations, especially at the beginning of the series. Repeat the analyses of Problem 6,...
Study smarter with the SolutionInn App