Choice Coffee Has Computed Their Fixed Costs to Be

Multiple Choice

Choice Coffee has computed their fixed costs to be $.20 for every cup of coffee they sell given an average daily sales level of 600 cups. They charge $1.65 per cup of coffee. The variable cost per cup is $.45. What is the contribution margin per cup of coffee sold?

A) $.65
B) $.90
C) $1.00
D) $1.20
E) $1.65