Patty’s pies produces pies. The company has a fixed cost of $20,000. Each pie sells for $8.75 with a variable cost of $4.00 per pie. Find the breakeven point for patty’s pies

To find the breakeven point, we need to calculate the number of pies Patty's Pies must sell to cover both its fixed and variable costs. This is achieved when total revenue equals total costs.

### Given Information:
1. **Fixed Cost (FC):** $20,000
2. **Selling Price per Pie (SP):** $8.75
3. **Variable Cost per Pie (VC):** $4.00

### Formula for the Breakeven Point (in units):
\[
\text{Breakeven Point} = \frac{\text{Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}
\]

### Step-by-Step Calculation:
1. **Determine the contribution margin per pie:**
   \[
   \text{Contribution Margin} = \text{SP} - \text{VC} = 8.75 - 4.00 = 4.75
   \]

2. **Calculate the breakeven point in units:**
   \[
   \text{Breakeven Point} = \frac{20000}{4.75} \approx 4211 \text{ pies}
   \]

### Conclusion:
Patty's Pies must sell approximately **4,211 pies** to break even.

Would you like more details on the calculation or have any questions?

### Related Questions:
1. How would changes in fixed costs affect the breakeven point?
2. What happens to the breakeven point if the selling price is increased to $9.00 per pie?
3. How would an increase in variable costs per pie impact the breakeven point?
4. What is the total revenue at the breakeven point?
5. How many pies need to be sold to achieve a profit of $5,000?

### Tip:
To reduce the breakeven point, a company can either increase the selling price or reduce the variable and/or fixed costs.

Patty’s pies produces pies. The company has a fixed cost of $20,000. Each pie sells for $8.75 with a variable cost of $4.00 per pie. Find the breakeven point for Patty’s pies.

Discover how to calculate the breakeven point for Patty’s Pies, where fixed costs are $20,000, selling price per pie is $8.75, and variable cost per pie is $4.00. Learn step-by-step methods to find out that approximately 4,211 pies need to be sold to cover costs.

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