Anitra Anthony sells a variety of pottery items at regional craft fairs. Her fixed costs (depreciation on the kiln, utilities, tools, portable selling booth) are $4,325 per year. The average price for a piece of pottery is $6.50, and the average variable cost (e.g., clay, paints, glazes, and price tags) is $4 per item.

Required:

1. How many pieces of pottery must Anitra sell to just cover her expenses?

2. If Anitra wants to earn $7,000 in profit, how many pieces of pottery must she sell?

Prepare a variable-costing income statement to verify your answer.