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Ahmed running a Pizza restaurant with the fixed cost of 2,750KD (rent and salary of workers). Average price of a Pizza is 4.2
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Answer #1

The minimum number of pizza's to be sold in order to meet Ahmed' Fixed Cost of 2750KD is

Break-Even Sales (Units)= Fixed Cost/Contribution

Where, Contribution= Selling price-Variable Cost

Given, Fixed Cost = 2750KD

Average Selling Price of a Pizza 4.200KD

Variable Cost is 1.600KD per Pizza.

Now, Contribution= 4.200KD-1.600 KD=2.600KD which is also the Gross Margin.

To recover his cost Ahmed has to sell 2750/2.600= 1057.692 i.e., 1058 pizzas per month

In a day he has to sell 1058/30=35 pizzas

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