Title: Competency Assessment: (CU2 M3) Breakeven Analysis
Course: SkillsCom BA 223 16.0 > Section: Credit Unit 2 Module 3 - Pricing

Lou plans to open a pie shop at the mall, which will sell individual slices of pie to shoppers at the mall. The rent for the pie shop is $750 per month. Several helpers will be hired to help staff the shop. The cost of hired help is $15 per hour for 100 hours help per month. Lou will purchase whole pies for $8, and then cut each pie into eight individual slices. The expense for a plate, fork, and napkin for each slice is $.50 (50 cents).

If Lou sells each slice of pie for $2.50, how many units will he have to sell in a month to breakeven? If the slice price is $3.00? If the price is $4.00/slice?

Hint: Identify the fixed costs and the variable costs, then use the formula for the breakeven point. Show your work, and label your numbers.