Multiproduct CVP Analysis Rio Coffee Shoppe sells two coffee drinks, a regular coffee and a latte…. 1 answer below »

Multiproduct CVP Analysis

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)

$1.50

$2.50

Variable costs (per cup)

.70

1.30

The monthly fixed costs at Rio are $6,720. Based on experience, the manager at Rio knows that the store sells 60 percent regular coffee and 40 percent lattes.

Required

How many cups of regular coffee and lattes must Rio sell every month to break even?