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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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2 years ago
Crispy Fried Chicken bought equipment on January 2​, 2016​, for $ 18 comma 000. The equipment was expected to remain in service
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Answer:

Please check the attached image for the depreciation schedule

2. Units of production method

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Book value in year 1 = Cost of asset - Depreciation expense of year 1

Book value in year in subsequent years = previous book value - that year's depreciation expense

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($18,000 - $3,000) / 4 = $3,750

Depreciation expense each year of the useful life is $3,750

Depreciation expense using the double declining method = Depreciation factor x cost of the asset

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Depreciation expense in year 1 = 0.5 x $18,000 = $9,000

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Book value = $9,000 - $4,500 = $4,500

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Depreciation expense in year 1 = ($18,000 - $3,000) x (300 / 3000) = $1,500

Depreciation expense in year 2 =18,000 - $3,000) x (900 / 3000) = $4,500

Depreciation expense in year 3 = (18,000 - $3,000) x (1200 / 3000) = $6,000

Depreciation expense in year 3 = (18,000 - $3,000) x (600 / 3000) = $3,000

The Units of production method tracks wear and tear accurately because deprecation depends on the production each year.

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