Question 903744: The General Store at State University is an auxiliary bookstore located near the dormitories sells academic supplies, toiletries, sweatshirts and T-shirts, magazines, packaged food items, canned soft drinks and fruit drinks. The manager of the store has noticed that several pizza deli services near campus make frequent deliveries. As such, the manager is considering selling pi the store. She could buy premade frozen pizzas and heat them in an oven. The cost of the oven freezer would be $27,000. The frozen pizzas cost $3.75 each to buy from a distributor and to pare (including labor and a box). To be competitive with the local delivery services, the man: believes she should sell the pizzas for $8.95 apiece. The manager needs to write up a propos the university's director of auxiliary services.
a. Determine how many pizzas would have to be sold to break even.
b. If the General Store sells 20 pizzas per day, how many days would it take to break even?
c. The manager of the store anticipates that once the local pizza delivery services start losing business they will react by cutting prices. If after a month (30 days) the manager has to lower the price of a pizza to $7.95 to keep demand at 20 pizzas per day, as she expects, what will the new break-even point be, and how long will it take the store to break even?
Answer by richwmiller(17219)   (Show Source):
You can put this solution on YOUR website! a) (8.95-3.75)p=27000
5.2p=27000
p=27000/5.2
p=5192.3 pizza to break even
b)
259.6 days to break even selling 20 pizzas a day
c)
We are at day 31 now having sold 30*20=600 pizzas
600*5.2=$3120 sold
27000-3120=23880
(7.95-3.75)p=23880
4.2p=23880
p=23880/4.2=5685.7 pizzas to sell to break even
5685.7/20=284.3 more days to break even
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