Bristol Car Service offers airport service in a medium-sized city. Bristol charges US$38 per trip to or from the airport. Variable cost of a trip, fuel, driver, etc. for a total of $36. Bristol Rainbow Tours has a fixed cost of $620 per month.

The owner of B. Bristol believes that 325 trips is a reasonable estimate for average monthly demand. What is the margin of safety in terms of the number of airport journeys?

Moreover:

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
Selling price (per glass)	$	1.60		$	2.80
Variable costs (per cup)		0.80			1.20

Fixed costs in Rio are $7,104 per month. Based on experience, the manager in Rio knows that the store sells 80 percent regular coffee and 20 percent lattes.

Necessary:

How many cups of regular coffee and lattes does Rio have to sell each month to stay head-to-head?

Answer rating: 100% (QA)

The margin of safety in terms of the number of airport journeys 38 x 325 trips 12... View the full answer