Use the working papers and data from Work Together 15-2. Forms for completing this Work Together are provided in the Working Papers. Your instructor will guide you through the following examples.

1. Assume that Cherie’s Pizza wants a net income for July of $3,000. Calculate the amount of sales dollars needed to achieve this net income.

2. Determine the net income or loss if:

(a) 4,000 units are sold;

(b) 5,000 units are sold;

(c) 6,000 units are sold.

3. Assume Cherie’s Pizza normally sells 7,500 pizzas in July. If the selling price is reduced by $.50, Cherie’s expects to sell 9,000 pizzas. Calculate the effect on net income of this change.

Data from Work Together 15-2

An income statement for Cherie’s Pizza is included in the Working Papers. 

Use the following information to calculate the breakeven point in sales dollars and unit sales for July. The August information will be used to complete the On Your Own below.

Prepare a breakeven income statement for July of the current year.

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Net Sales July $60,000.00 August $80,000.00 Unit Sales Price $8.00 $8.00 Contribution Margin $12,000.00 $10,000.00 Total Fixed Costs $8,000.00 $8,000.00 Unit Variable Cost $6.40 $7.00