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Determine how many pizzas must gary sell to break even

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Reference no: EM132471411

Question 1:

Gary's Pizza delivers pizzas to residences and apartments near a major state university. The company's annual fixed costs are $72,000. The sales price averages $18, and it costs the firm $6 to make and deliver each pizza.

Required:

Question A. Determine how many pizzas must Gary sell to break even?

Question B. Determine many pizzas must the company sell to earn a target profit of $54,000?

Question C. If budgeted sales total 8,500 pizzas, determine how much is the company's safety margin in dollars?

Question 2:

Question A. ABC Corporation's product code. A132 has a negative contribution margin. How can such a situation arise? Should the company continue to stock and sell this product? Explain.

Reference no: EM132471411

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