Question: 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
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 | |||||
| Sales price (per cup) | $ | 1.70 | $ | 2.80 | ||
| Variable costs (per cup) | 0.80 | 1.10 | ||||
The monthly fixed costs at Rio are $7,252. Based on experience, the manager at Rio knows that the store sells 90 percent regular coffee and 10 percent lattes.
Required:
How many cups of regular coffee and lattes must Rio sell every month to break even?
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