FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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College Pizza delivers pizzas to the dormitories and apartments near a major state university. The company's annual fixed expenses
are $58,000. The sales price of a pizza is $10, and it costs the company $2 to make and deliver each pizza. (In the following
requirements, ignore income taxes.)
Required:
usUsing the contribution-margin approach, compute the company's break-even point in units (pizzas).
What is the contribution-margin ratio?
Note: Enter your answer as a decimal.
Compute the break-even sales revenue. Use the contribution-margin ratio in your calculation.
How many pizzas must the company sell to earn a target profit of $64,000? Use the equation method.
Break-even point
Contribution-margin ratio
Break-even point sales dollars.
Number of pizzas
pizzas
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Transcribed Image Text:College Pizza delivers pizzas to the dormitories and apartments near a major state university. The company's annual fixed expenses are $58,000. The sales price of a pizza is $10, and it costs the company $2 to make and deliver each pizza. (In the following requirements, ignore income taxes.) Required: usUsing the contribution-margin approach, compute the company's break-even point in units (pizzas). What is the contribution-margin ratio? Note: Enter your answer as a decimal. Compute the break-even sales revenue. Use the contribution-margin ratio in your calculation. How many pizzas must the company sell to earn a target profit of $64,000? Use the equation method. Break-even point Contribution-margin ratio Break-even point sales dollars. Number of pizzas pizzas
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