Answer:
A) it will need to sale 5193 pizzas
B) selling 20 per day it will take 260 days
C) if price decrease by 1 dollar to 7.95 the new BEP will be 6,429 dollars
and will take 322 days to achieve break even
Explanation:
fixed cost: 27,000 oven
sales price 8.95
variable cost 3.75 frozen pizza:
contribution margin: 5.2
break even:
27,000 dollars / 5.2 dollar per pizza= 5.192,30
5,192 pizzas / 20 per day = 259.6 days
If sale price decrease by one dollar:
27,000 dollar / 4.2 contribution per pizza= 6.428,57
6,429 / 20 per day = 321.4
