Tom's Tire Tower, Inc

question 10

Essay

Tom's Tire Tower, Inc., sells tires for $110. The unit variable cost per tire is $85. Fixed costs total $475,000.
Required:
a.What is the contribution margin per tire?
b.What is the breakeven point in tires?
c.How many tires must be sold to earn a pretax income of $450,000?
d.What is the margin of safety, assuming 33,000 tires are sold?

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Definitions:

Knights Templar

A medieval Christian military order that became prominent during the Crusades, known for their banking practices and skilled fighters.

First Crusade

The initial campaign of the Crusades (1096-1099), launched to reclaim Jerusalem and other holy lands from Muslim control.

Scriptorium

A room in medieval European monasteries dedicated to the copying, writing, and illuminating of manuscripts.

Moissac

A commune in southern France known for its Abbey Church of Saint-Pierre, which is famous for its Romanesque sculptures.