Questions
Numerical
You sell a pizza for $20 and it costs you $15 to make it. If your fixed costs are $80,000 and you aim to make a net income of $4’500 this month, how much must your dollar sales be? Assume your tax rate is 30%.
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Step-by-Step Analysis
To begin, let’s identify the per-unit economics: the pizza sells for $20 and costs $15 to make, so the contribution margin per pizza is $5.
Now, we know the business has fixed costs of $80,000 and a target net income of $4,500 for the month. Since tax......Login to view full explanationLog in for full answers
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