Pizza Corner Break-even Case
Business context
A small pizza corner / takeaway selling mostly individual pizzas. The owner wants to know how many pizzas must be sold each month just to cover all costs.
The numbers below are simplified fictional examples used for educational purposes.
The numbers
| Average selling price per pizza | $10.00 |
| Variable cost per pizza (ingredients, packaging) | $3.50 |
| Fixed monthly costs (rent, equipment, salaries, utilities) | $6,500 |
Step-by-step calculation
Contribution margin per pizza = $10.00 − $3.50 = $6.50
Break-even units = $6,500 / $6.50 = 1,000 pizzas / month
Break-even sales = 1,000 × $10.00 = $10,000 / month
| Contribution margin per pizza | $6.50 |
| Break-even units | 1,000 pizzas |
| Break-even sales | $10,000 |
What this means
With roughly 30 operating days per month, the shop needs about 33–34 pizzas per day just to break even. Anything below that is a loss; anything above starts to build real profit. Each additional pizza after break-even contributes its full $6.50 of margin (since fixed costs are already covered).
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What happens if costs rise
If rent goes up by $500 (fixed costs become $7,000), break-even moves to about 1,077 pizzas per month (~36 per day).
If food costs rise so variable cost per pizza goes from $3.50 to $4.00, the contribution margin drops to $6.00. Break-even becomes $6,500 / $6.00 ≈ 1,084 pizzas per month, even though the selling price did not change.
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This case study is for educational and planning purposes only. It is not accounting, tax, legal, investment, or financial advice. Numbers shown are simplified fictional examples.