Xing-fu and his business partner manufacture car tires which they sell for $105 per tire. The fixed costs are $85,800 per year and variable costs are $45 per tire.

a. How many units would they be required to sell to make a net income of $75,000 per year?

b. Find the break-even point per year if the variable costs increase by $5 per tire.

AppendixLO1