Question: Toms caf sells filter coffee. Tom has calculated that it has fixed costs of $3000. The unit variable cost associated with producing a cup of

Tom’s café sells filter coffee. Tom has calculated that it has fixed costs of $3000. The unit variable cost associated with producing a cup of coffee is the sum of; $2 raw material, $1.5 factory labor, and $1.5 electricity costs. The per cup of coffee is priced at $7.

If the Lucy’s café plans to produce and sell 420,000 units calculate and interpret

a. Unit cost

b. Break-even volume in units and dollar sales.

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