Use the following information to answer questions 6 & 7
Jim owns and operates a pizza franchise that makes and sells made to order deepdish pizzas, Chicago style. The expected selling price is $14 per pizza. The projected variable cost per pizza is $4. The estimated fixed costs per month are $15,000.
Determine the number of pizzas that must be sold to make a monthly Net Income of $35,000?
Question 6 options:
7,500 

5,000 

2,500 

2,000 
SOLUTION:
Selling price $14 per pizza
Variable cost$4 per pizza
Estimated fixed cost$15000
Sales  $14
Less:variable cost (4)
Contribution per unit $10
Net income=35000
Contribution(units)=fixed cost=15000/10=1500
Net income units=35000/10=3500
No of units=Contribution units+net income units=1500+3500=5000 units
Number of pizzas that must be sold to make a monthly Net income of $35000 are 5000 units so that
Contribution(5000*10)=50000
less:fixed costs =15000
Net income =$35000
OPTION B is correct
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