Chapter $7$: Cost$-$Volume$-$Profit Analysis

You're managing a small coffee shop. Your plan for the upcoming year is to sell $25,000$ cups of specialty coffee at a price of $$5$ each. The cost of coffee beans, milk, and other ingredients per cup is $$2.$ You also have fixed costs including rent, utilities, and equipment maintenance, totaling $$40,000$ for the year.

Required:

Calculate the break$-$even number of cups of coffee.

If the selling price increases, the break$-$even units will increase or decrease? Why?