Q#4 ( 08 ) Auto Tires, Inc. sells tires to service stations for an average of $55 each. The variable costs of each tire is $35 and monthly fixed manufacturing costs total $25,000. Other monthly fixed costs of the company total $15,000.

Required:

a. What is the break-even level in tires?

b. What is the margin of safety, assuming sales total $135,000?

c. What is the break-even level in tires, assuming variable costs increase by 42.85 percent?

d. What is the break-even level in tires, assuming the selling price goes up by 16 per unit , fixed manufacturing costs decline by 10 percent and other fixed costs decline by $1500?