EX 7-24 (Algo) Pizza Delivery Business; Basic CVP Analysis (LO 7-1, 7-2, 7-4) College Pizza delivers pizzas to the dormitories and apartments near a major state university. The company's annual fixed expenses are $63,000. The sales price of a pizza is $20, and it costs the company $10 to make and deliver each pizza. (In the following requirements, ignore income taxes.) Required: 1. Using the contribution-margin approach, compute the company's break-even point in units (pizzas). 2. What is the contribution-margin ratio? Note: Enter your answer as a decimal. 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 $69,000? Use the equation method. 1. Break-even point 2. Contribution-margin ratio 3. Break-even point sales dollars 4. Number of pizzas pizzas
EX 7-24 (Algo) Pizza Delivery Business; Basic CVP Analysis (LO 7-1, 7-2, 7-4) College Pizza delivers pizzas to the dormitories and apartments near a major state university. The company's annual fixed expenses are $63,000. The sales price of a pizza is $20, and it costs the company $10 to make and deliver each pizza. (In the following requirements, ignore income taxes.) Required: 1. Using the contribution-margin approach, compute the company's break-even point in units (pizzas). 2. What is the contribution-margin ratio? Note: Enter your answer as a decimal. 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 $69,000? Use the equation method. 1. Break-even point 2. Contribution-margin ratio 3. Break-even point sales dollars 4. Number of pizzas pizzas
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![EX 7-24 (Algo) Pizza Delivery Business; Basic CVP Analysis (LO 7-1, 7-2, 7-4)
College Pizza delivers pizzas to the dormitories and apartments near a major state university. The company's annual fixed expenses
are $63,000. The sales price of a pizza is $20, and it costs the company $10 to make and deliver each pizza. (In the following
requirements, ignore income taxes.)
Required:
1. Using the contribution-margin approach, compute the company's break-even point in units (pizzas).
2. What is the contribution-margin ratio?
Note: Enter your answer as a decimal.
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 $69,000? Use the equation method.
1. Break-even point
2. Contribution-margin ratio
3. Break-even point sales dollars
4. Number of pizzas
pizzas](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa3cae971-3c7b-4b58-988d-d641335a2bed%2Fd5d9abad-b3e1-4ae7-9872-7518165e8aef%2F9l0k3ce_processed.jpeg&w=3840&q=75)
Transcribed Image Text:EX 7-24 (Algo) Pizza Delivery Business; Basic CVP Analysis (LO 7-1, 7-2, 7-4)
College Pizza delivers pizzas to the dormitories and apartments near a major state university. The company's annual fixed expenses
are $63,000. The sales price of a pizza is $20, and it costs the company $10 to make and deliver each pizza. (In the following
requirements, ignore income taxes.)
Required:
1. Using the contribution-margin approach, compute the company's break-even point in units (pizzas).
2. What is the contribution-margin ratio?
Note: Enter your answer as a decimal.
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 $69,000? Use the equation method.
1. Break-even point
2. Contribution-margin ratio
3. Break-even point sales dollars
4. Number of pizzas
pizzas
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