A small coffee shop currently offers a cup of cafe latte for P109. The variable costs are P60 per cup, and 10,386 cups are sold annually and a profit of P200,758 is realized per year. A new design in making the coffee will increase the variable costs by 10% and Fixed Costs by 20% but sales will increase to 12,231 cups per year. If we employ the new design, at what selling price do we break even?

A small coffee shop currently offers a cup of cafe latte for P109. The variable costs are P60 per cup, and 10,386 cups are sold annually and a profit of P200,758 is realized per year. A new design in making the coffee will increase the variable costs by 10% and Fixed Costs by 20% but sales will increase to 12,231 cups per year. If we employ the new design, at what selling price do we break even?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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