What is your average total cost

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Starbucks on K Street in Washington DC has stiff competition from several other small coffee shops in town. After your George Town University MBA, you are the newly minted Washington area VP and want to take a deeper look at the cost structure of this particular location and was given these set of information on that store. The Starbucks on K Street in Washington Dc has a lease expense amount of $50,000/year. There are 10 people working at the location at an average salary per employee of $50,000/year. There is also an insurance cost of $1,000/year on the facility. On average, the Starbucks produce 300,000 lattes a year. (For simplicity, assume that is the only drink the shop produces) What are the fixed cost items and what are the variable cost items at your facility? What is your total fixed cost and total variable cost? What is your total cost? What is your Average Fixed Cost? What is your Average Variable Cost? What is your Average Total Cost?

Reference no: EM13149392

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