Answer:
A: 5,192 pizzas
B: 260 days
C: the break even point will be 6,429 dollars in 321 days.
Explanation:
Firstly:
Cost of the oven and freezer = $27,000
Cost of frozen pizzas = $3.75
Proposed sale price of pizza = $8.95
The actual sale price = proposed sale price - cost of the frozen pizza = $8.95 - $3.75
= $5.2 each
A. For the pizza to be sold to break even, we will divide the cost of oven and freezer by the actual saleprice.
Thus:
Break even= $27000 divide by $5.2 = $5,192.307.
B. If the General Store sells 20 pizzas per day, the number of days to break even will be given by:
- Dividing the break even price by the number of pizza per day.
5192.306 divide by 20 (equals) = 259.615 days approximately 260 days.
C. Since the price was reduced from $8.95 to $7.95 with a significant reduction in just a dollar, the actual sales price will be $7.95 minus $3.75 which is equal to $4.2.
Therefore the break even will be;
$27000 divide by $4.2 = $6428.571
Approximately $6,429.
And the number of days to break even will be; $6428.571 divide 20 pizzas = 321.421 days.
Approximately 321 days.