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Tyre Makers Ltd makes and sells tyres in the Mandeville area. They manufacture three (3) types of tyre?: Regular, Wide, and Low-Profile. The following information
Tyre Makers Ltd makes and sells tyres in the Mandeville area. They manufacture three (3) types of tyre?: Regular, Wide, and Low-Profile. The following information is available for the three types of tyre: Selling price Variable cost Contribution margin Expected sales Fixed costs are $2 , 400 , 000 Required: Required: A. Calculate the weighted average contribution margin per unit. [3 marks] B. Assuming the sales mix does not change; calculate the number of types of tyre to be sold to achieve break-even point? [5 marks] C. Assuming the sales mix does not change and if the target net income before tax for the coming year is $480 , 000 , how many units of each tyre must be sold? [6 marks] D. Assuming the sales mix does not change and the company desires a profit after tax of $600 , 000 , how many units of each tyre must be sold? The prevailing tax rate is 40%
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