Question
Auto Tires, Inc. sells tires to service stations for an average of $45 each. The variable costs of each tire is $30 and monthly fixed
Auto Tires, Inc. sells tires to service stations for an average of $45 each. The variable costs of each tire is $30 and monthly fixed manufacturing costs total $15,000. Other monthly fixed costs of the company total $12,000.
Compute
What is the break-even level in tires?
What is the margin of safety, assuming sales total $90,000?
What is the break-even level in tires, assuming variable costs increase by 20 percent?
What is the break-even level in tires, assuming the selling price goes up by 20 percent, fixed manufacturing costs decline by 10 percent and other fixed costs decline by $1500?
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