Question

University Pizza delivers pizzas to the residential colleges and flats near a major university. The company’s annual fixed costs are $40,000. The sales price of a pizza is $10 and it costs the company $5 to make and deliver each pizza. Required; a) Using the contribution approach, calculate the company’s break-even point in units (pizzas). b) Calculate the break-even point in sales dollars. c) How many pizzas must the company sell to earn a target profit of $65,000?

129

likes
643 views

Answer to a math question University Pizza delivers pizzas to the residential colleges and flats near a major university. The company’s annual fixed costs are $40,000. The sales price of a pizza is $10 and it costs the company $5 to make and deliver each pizza. Required; a) Using the contribution approach, calculate the company’s break-even point in units (pizzas). b) Calculate the break-even point in sales dollars. c) How many pizzas must the company sell to earn a target profit of $65,000?

Expert avatar
Birdie
4.5
98 Answers
a)

\text{Break-even point in units} = \frac{\text{Fixed Costs}}{\text{Sales Price per Unit} - \text{Variable Cost per Unit}}

\text{Fixed Costs} = \$40,000

\text{Sales Price per Unit} = \$10

\text{Variable Cost per Unit} = \$5

\text{Break-even point in units} = \frac{\$40,000}{\$10 - \$5}

\text{Break-even point in units} = \frac{\$40,000}{\$5}

\text{Break-even point in units} = 8,000 \text{ pizzas}

b)

\text{Break-even point in sales dollars} = \text{Break-even point in units} \times \text{Sales Price per Unit}

\text{Break-even point in sales dollars} = 8,000 \text{ pizzas} \times \$10 \text{ per pizza}

\text{Break-even point in sales dollars} = \$80,000

c)

\text{Total Sales Needed} = \frac{\text{Fixed Costs} + \text{Target Profit}}{\text{Sales Price per Unit} - \text{Variable Cost per Unit}}

\text{Fixed Costs} = \$40,000

\text{Target Profit} = \$65,000

\text{Sales Price per Unit} = \$10

\text{Variable Cost per Unit} = \$5

\text{Total Sales Needed} = \frac{\$40,000 + \$65,000}{\$10 - \$5}

\text{Total Sales Needed} = \frac{\$105,000}{\$5}

\text{Total Sales Needed} = 21,000 \text{ pizzas}

Answers:
a) 8,000 \text{ pizzas}
b) \$80,000
c) 21,000 \text{ pizzas}

Frequently asked questions (FAQs)
Math question: For the function f(x) = 1/x, find the x-coordinate(s) of the vertical asymptotes and the range of possible y-values.
+
Math question: What is the 5th order derivative of f(x) = 2x^3 - 4x^2 + 7x - 1?
+
Math question: What is the value of f(x) when x = 3, and f(x) = 2x^2 - 5x + 1?
+
New questions in Mathematics
Solution to the equation y'' - y' - 6y = 0
Solve: −3(−2x+23)+12=6(−4x+9)+9.
If O(3,-2) is reflected across x = 2. What are the coordinates of O
The length and breadth of my rectangular vegetable garden is 12,5m and 7,25m respectively. What is the perimeter of the garden?
Elliot opened a savings account and deposited $5000.00 as principal. The account earns 4% interest, compounded annually. How much interest will he earn after 5 years? Round your answer to the nearest cent.
In a store there are packets of chocolate, strawberry, tutti-frutti, lemon, grape and banana sweets. If a person needs to choose 4 flavors of candy from those available, how many ways can they make that choice?
Two events E and F are​ ________ if the occurrence of event E in a probability experiment does not affect the probability of event F.
Suppose 50% of the doctors and hospital are surgeons if a sample of 576 doctors is selected what is the probability that the sample proportion of surgeons will be greater than 55% round your answer to four decimal places
Divide 22 by 5 solve it by array and an area model
calculate the normal vector of line y = -0.75x + 3
If f(x,y)=6xy^2+3y^3 find (∫3,-2) f(x,y)dx.
Let A, B, C and D be sets such that | A| = |C| and |B| = |D|. Prove that |A × B| = |C × D|
The simple average of 15 , 30 , 40 , and 45 is
-1%2F2x-4%3D18
In a physics degree course, there is an average dropout of 17 students in the first semester. What is the probability that the number of dropouts in the first semester in a randomly selected year has between 13 and 16 students?
17. A loan for $104259 is taken out for 10 years with an annual interest rate of 9.4%, compounded quarterly. What quarterly payment is required to pay the loan off in 10 years? Enter to the nearest cent (two decimals). Do not use $ signs or commas in the answer.
A multiple choice exam is made up of 10 questions; Each question has 5 options and only one of them is correct. If a person answers at random, what is the probability of answering only 3 good questions?
Translate to an equation and solve. Let x be the unknown number: What number is 52% of 81.
A buyer purchased a North Carolina home for $475,250. The seller allowed the buyer to assume his first small mortgage with a loan balance of $110,000. How much is the excise tax paid in the transaction? $951 $729.50 $950.50 $221 none of the above
A person travels by car from one city to another with different constant speeds between pairs of cities. She drives for 55.0 min at 100.0 km/h, 14.0 min at 65.0 km/h, and 45.0 min at 60.0 km/h and spends 20.0 min eating lunch and buying gas. (a) Determine the average speed for the trip.