Tom's Tyres Inc

question 170

Essay

Tom's Tyres Inc. ,sells tyres for $110.The unit variable cost per tyre is $85.Fixed costs total $475 000.
Required:
a.What is the contribution margin per tyre?
b.What is the break-even point in tyres?
c.How many tyres must be sold to earn a pre-tax profit of $300 000?
d.What is the margin of safety,assuming 23 000 tyres are sold?
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Definitions:

Perceptive Set

A psychological framework that influences observation and interpretation, predisposing an individual to perceive things in a certain way.

Empathy Capacity

The ability of an individual to understand and share the feelings of another person.

Attributional Style

The way in which one is disposed toward interpreting outcomes (successes or failures), as in tending to place blame or responsibility on oneself or on external factors.

Anorexia Nervosa

An eating disorder characterized by irrational fear of weight gain, distorted body image, and severe weight loss.