Answer:
Instructions are listed below
Explanation:
Giving the following information:
It is expected that each pie will sell for $15 and the variable costs per pie will be $9. Total fixed operating costs are expected to be $25,000. Meyerson’s faces a marginal tax rate of 35%, will have interest expense associated with this line of $3,500.
Break-even point (units)= fixed costs/ contribution margin
Break-even point (units)= (25000+3500)/(15-9)= 4750 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= (25000+3500)/[(15-9)/15]
Break-even point (dollars)= $71,250