The Coffee Express has computed its fixed costs to be $0.34 for every cup of coffee it sells given annual sales of 212,000 cups.The sales price is $1.49 per cup while the variable cost per cup is $0.63.How many cups of coffee must it sell to break-even on a cash basis?
A)83,814
B)96,470
C)123,910
D)167,630
E)212,000

Question

Quizplus · Accepted Answer

Q_{cash break-even} = ($0.34 × 212,000)/($1.49 - $0.63) = 83,814 cups

The Coffee Express Has Computed Its Fixed Costs to Be