College Pizza delivers pizzas to the dormitories and apartments near a major slate university. The company’s annual fixed expenses are $40,000. The sales price of a pizza is $10, and it costs the company $5 to make and deliver each pizza. (In the following requirements, ignore income taxes.)

Required:

1. Using the contribution-margin approach, compute the company’s break-even point in units (pizzas).

2. What is the contribution-margin ratio’?

3. Compute the break-even sales revenue. Use the contribution-margin ratio in your calculation.

4. How many pizzas must the company sell to earn a target net profit of $65,000? Use the equation method.