Roadrunner Trucking Co. is projecting average revenue of $4.00 per mile and variable costs of $3.50 per mile for the year 2015. Fixed costs are budgeted at $2,000,000. The tax rate for Roadrunner is 40%. Management wants to make an after tax profit of $500,000. Required: 1. Compute the contribution margin per mile and the contribution margin ratio. 2. Compute the break even in miles and revenue taking into consideration projected after tax profit and taxes. 3. Presently, Roadrunner buys the liability insurance on a fixed premium of $10,000 per month. It is a part of the fixed costs. They have received a proposal from an agency to write the insurance at 10 cents per mile in lieu of the fixed premium. Calculate the new break even in miles and revenue taking into consideration taxes and profits. 4. Should they make the change and discuss your rationale?