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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