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Lana71 [14]
4 years ago
9

if we sell pizzas for $11.99 and our business' variable costs are 60% of the selling price, and we have fixed costs of $21,000 e

ach month, can you determine how many pizzas we have to sell to breakeven? Ignore taxes. Show your work, or explain why this question can't be solved.
Business
1 answer:
Daniel [21]4 years ago
3 0

Answer:

<u>4375</u> pizzas have to sell to breakeven.

Explanation:

Given:

If we sell pizzas for $11.99 and our business' variable costs are 60% of the selling price, and we have fixed costs of $21,000 each month.

Now, to find pizzas to sell to breakeven.

Fixed costs = $21,000.

Sale price = $11.99.

Variable costs:

60% of the selling price.

60\%\ of\ 11.99\\=\frac{60}{100}\times 11.99 =0.6\times 11.99\\=\$7.19.

Now, to get the number of pizzas to sell to breakeven we put formula:

<u><em>Breakeven = Fixed Costs ÷ (Sale price – Variable costs ) </em></u>

Breakeven=21,000\div (11.99-7.19)

Breakeven=21,000\div 4.8

Breakeven=4375.

Therefore, 4375 pizzas have to sell to breakeven.

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