Question
A pizza restaurant sells 2,300 pizzas a month at an average price of $20 each. The total fixed costs for a month are $15,400 and
A pizza restaurant sells 2,300 pizzas a month at an average price of $20 each. The total fixed costs for a month are $15,400 and variable costs are 30% of sales.
Answer the following questions based on the data above: 1. Compute the contribution margin in total dollars. (3 pts) 2. Compute the contribution margin per unit. (3 pts) 3. Compute the contribution margin ratio. (3 pts) 4. Compute the Break-Even Sales in dollars. (4 pts) 5. Compute the Break-Even Sales in units (4 pts) 6. Compute the Margin of Safety in dollars (4 pts) 7. Compute the Sales in dollars required to produce a Target Net Income of $20,000 a month (round to whole dollars) (4 pts)
Instructions: Show all calculations for each item, by numbering your answers.
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