Question

We have calculated the following costs:
Dough, sauce and toppings $4.10 ea
Boxes and napkins 0.50 ea
delivery $1.00
Weekly rental of pizza oven $250
Licenses $30

Selling Price for each pizza $13
Weekly number of pizzas we can cook 500
Estimated sales per day 50

Variable cost ($) 5.60

Contribution Margin ($) 7.40

Breakeven Point (units) 37.83

Breakeven Point ($) 491.89
Estimated profit #3.420

The HR department, bless their heart wants to buy 20 pizzas for the WPU staff someday during exam week. Whats the lowest price the greedy business faculty will sell pizza to them?

Based on your anser what assumption are you maing?

There have been some shady characters hanging around so we got the volleyball team to guard our business. They charge $40 a day or 6 free pizzas. Which way would we prefer to pay them, and why?

What if we made the pizzas bigger?

Answer 1