Question

It costs a pizzeria $0.75 to make a slice of regular pizza. The expenses to run the pizzeria include salaries ($1,250 a day), rent ($120 a day), utilities ($10 a day), advertising ($18 a day), and supplies ($15 a day). How many slices would they have to sell each day to break even if each slice was sold for $3?

Answer 1

To determine how many slices of pizza the pizzeria needs to sell to break even, we first need to calculate the total daily expenses and then establish how much revenue is generated from selling each slice of pizza.

1. Calculate total daily expenses:

   • Salaries: $1,250
   • Rent: $120
   • Utilities: $10
   • Advertising: $18
   • Supplies: $15

   Adding these together gives: \[ \text{Total daily expenses} = 1,250 + 120 + 10 + 18 + 15 = 1,413 \]

2. Determine the cost to make one slice of pizza: The cost to make a slice of regular pizza is given as: \[ \text{Cost per slice} = 0.75 \]

3. Calculate the revenue generated from selling one slice of pizza: The selling price for each slice is: \[ \text{Sell price per slice} = 3 \]

4. Calculate the profit per slice (Revenue - Cost): \[ \text{Profit per slice} = \text{Sell price per slice} - \text{Cost per slice} = 3 - 0.75 = 2.25 \]

5. Determine how many slices need to be sold to break even: To break even, total revenue must equal total expenses. If \( x \) is the number of slices sold, then: \[ \text{Total revenue} = \text{Profit per slice} \times x = 2.25x \] Setting total revenue equal to total expenses: \[ 2.25x = 1,413 \]

   Now, we solve for \( x \): \[ x = \frac{1,413}{2.25} \approx 628 \]

Thus, the pizzeria needs to sell approximately 628 slices of pizza each day to break even.