Exercise $7-24$ Pizza Delivery Business; Basic CVP Analysis $($ LO $7-1,7-2,7-4)$

College Pizza delivers pizzas to the dormitories and apartments near a major state 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:

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

What is the contribution$-$margin ratio?

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

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