Twelve months ago, David opened a coffee shop, The Daily Grind, in Mercy Hospital's former gift shop. David was confident that he had the knowledge ro -"k. a success of this new business. He produced a quality product that people needed, had priced the product to be very competitive, and had a gteat location in a high-traffic area of the hospital. the first year of operations. Fringe benefits for David, including health insurance and payroll taxes, accounted for an additional $10,000 of cosrs for th. company. Part-time employees work an average of 24 hours each week and are paid $9 per hour. payroll taxes and other costs average about $1.00 pu, Lorr for part_ time employees. As shown in the following table, part_ time employees worked from 656 ho.r., to 727 hours Material Gosts each month: t3-n. o"il, *i;; ;;;;;; ;;";;-l A coffee beans costing $B per pound. Each pound I of coffee beans produces 256 ounces of coffee. boff"" I is soid in three sizes: a small cup holding g ourl..., " j medium cup holding 12 ounces, and a large .,rp hoid_ l ing 16 ounces. I The cups needed to serve the coffee cost $.0-5 for I the small cup, $.06 for the medium cup, and g.07 j for the large cup. Lids cost $.03 per cup-and are the i same regardless of cup size. Sleeves cost an additional I $.04 per cup. On average, sugar and cream cost $.02 oer I cup for small cups, $.03 for medium cups, and $.0+ fo. j large cups. jI _l lahor Gosts Month January February March April May June July August September October , November December Part-time Employee Labor Hours l22hours 656 hours 727 hours 705 hours -/27 hours 705 hours 727 hours 727 hours 705 hours 721 hours 705 hours lll nours three employees during the morning shift (7:00_11:00), two empioyees from 11:00 until 3:00, and rhree em_ ployees from 3:00 to 7:00. Labor is a fixed cosr, be_ cause the employees are paid regardless of whether coffee is sold. David worked 60 hours each week, he Daily Grind is open 12 hours each d,ay,7 days a week (365...