Richlyn Pizza delivers pizzas to the dormitories and apartments near a major state university. The companys annual fixed expenses are $40,000. The sales price of a pizza is $10, and it costs the company $5 to make and deliver each pizza. (In the following, ignore income taxes.)

Required:

1. Using the contribution-margin approach, compute the companys break-even point in units (pizzas).
2. What is the contribution-margin ratio?
3. Compute the break-even sales revenue. Use the contribution-margin ratio in your calculation.
4. How many pizzas must the company sell to earn a target profit of $65,000? Use the equation method.