[TeaCup]

Good Morning,

I've given this question a crack but am stuck on a few of the sub-questions involved, all I am requesting is some information / examples of how I am to come up with these answers which are required.

Information provided
Pizza Hutt delivers pizzas to the residential colleges and flats near a major university. The company’s annual fixed costs are $54,000. The sales price of a pizza is $10, and it costs the company $6 to make and deliver each pizza. (In the following requirements, ignore income taxes.)


1. Using the contribution margin approach, calculate the company’s break-even point in units (pizzas).

2. What is the contribution margin ratio?

3. Calculate the break-even point in sales dollars. Use the contribution margin ratio in your calculation.

4. How many pizzas must the company sell to earn a target net profit of
$60,000? Use the CVP equation.
- 28,500 Pizzas must be sold to reach the target net profit

Does anyone have a formula for the margin aspects that they could kindly advise me of so I can work out these questions? Any advice is greatly appreciated

Thanks :)

[TeaCup]

UPDATE: I think I have managed to work this one out, Thanks! :)