Tom owns a Pizza Restaurant. Expenses for the restaurant include raw material for pizza at $7.54 per slice, $106.00 as monthly rental and $65.00 monthly as insurance. A restaurant sells pizza at a rate of $12.54/slice. How many slices should the restaurant sell in a month to break even?

Answer 1

To find out how many slices Tom needs to sell to break even, we first need to calculate his total monthly expenses and then set that equal to his total revenue from selling the slices.

Step 1: Calculate Monthly Expenses

1. Fixed Expenses:

   • Monthly rent: $106.00
   • Monthly insurance: $65.00
   • Total fixed expenses = $106 + $65 = $171.00

2. Variable Expenses:

   • Cost of raw material per slice: $7.54

Step 2: Calculate Total Expenses for \( x \) slices

The total expenses for \( x \) slices sold can be calculated as: \[ \text{Total Expenses} = \text{Fixed Expenses} + \text{Variable Expenses} \] \[ \text{Total Expenses} = 171.00 + (7.54 \times x) \]

Step 3: Calculate Revenue for \( x \) slices

The revenue from selling \( x \) slices at $12.54 per slice is: \[ \text{Revenue} = 12.54 \times x \]

Step 4: Set Up the Break-Even Equation

To break even, total revenue must equal total expenses: \[ 12.54x = 171.00 + 7.54x \]

Step 5: Solve for \( x \)

First, we will rearrange the equation: \[ 12.54x - 7.54x = 171.00 \] \[ 5.00x = 171.00 \]

Now, solve for \( x \): \[ x = \frac{171.00}{5.00} = 34.2 \]

Since Tom cannot sell a fraction of a slice, he would need to sell at least 35 slices to break even.

Conclusion

Tom should sell 35 slices in a month to break even.