1. What is the break-even level in tires? 2. What is the margin of safety, assuming sales total $190,000? 3. What is the break-even level in tires, assuming variable costs increase by 20 percent and selling price increase by 17 per unit ?

Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter16: Cost-volume-profit Analysis
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Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...
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Auto Tires, Inc. sells tires to service stations for an average of $145 each. The variable costs of each tire is $85 and monthly fixed manufacturing costs total $45,000. Other monthly fixed costs of the company total $15,000.

 


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

2. What is the margin of safety, assuming sales total $190,000?

3. What is the break-even level in tires, assuming variable costs increase by 20 percent and selling price increase by 17 per unit ?

4. 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 $1500and variable cost decrease by 1 per unit ?

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