Problem
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?