Question

Tom owns a Pizza Restaurant. Expenses for the restaurant include raw material for pizza at $9.22 per slice, $106.00 as monthly rental and $55.00 monthly as insurance. A restaurant sells pizza at a rate of $14.22/slice. How many slices should the restaurant sell in a month to break even?

Answer 1

Break-even point in units= 32 slices

Step-by-step explanation:

Giving the following information:

Selling price= $14.22

Unitary variable cost= $9.22

Fixed costs= 106 + 55= $161

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 161/ (14.22 - 9.22)

Break-even point in units= 32 slices