Use the working papers and data from On Your Own 15-2. Forms for completing this On Your Own are provided in the Working Papers. Work independently to complete this problem.

1. Assume Cherie’s Pizza wants a net income for August of $3,000. Calculate the amount of sales dollars needed to achieve this net income.

2. Determine the net income or loss if:

(a) 7,000 units are sold;

(b) 8,000 units are sold;

(c) 9,000 units are sold.

3. Assume Cherie’s Pizza normally sells 10,000 pizzas in August. If the selling price is increased by $.50, Cherie’s expects to sell 9,500 pizzas. Calculate the effect on net income of this change.

Data from On Your Own

Use the August information from the Work Together above. An income statement for Cherie’s Pizza is included in the Working Papers. Work independently to complete this problem.
1. Calculate the breakeven point in sales dollars and unit sales for August.
2. Prepare a breakeven income statement for August of the current year.

Data from Work Together

An income statement for Cherie’s Pizza is included in the Working Papers. Your instructor will guide you through the following examples.
Use the following information to calculate the breakeven point in sales dollars and unit sales for July. The August information will be used to complete the On Your Own below.

Prepare a breakeven income statement for July of the current year.

Transcribed Image Text:

Net Sales Unit Sales Price Contribution Margin Total Fixed Costs Unit Variable Cost July $60,000.00 August $80,000.00 $8.00 $8.00 $12,000.00 $10,000.00 $8,000.00 $8,000.00 $6.40 $7.00