Route Two Tire Company Makes a Special Kind of Racing

question 149

Multiple Choice

Route Two Tire Company makes a special kind of racing tire.Variable costs are $220 per unit,and fixed costs are $31,000 per month.Route Two sells 500 units per month at a sales price of $300.The company believes that it can increase the price if the tire quality is upgraded.If so,the variable cost will increase to $230 per unit,and the fixed costs will rise by 25%.The CEO wishes to increase the company's operating income by 15%.Which sales price level would give the desired results? (Round your answer to the nearest cent.)

• A) $990.00 per unit
• B) $282.00 per unit
• C) $318.00 per unit
• D) $328.20 per unit

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Definitions:

Teenagers

Youth in the age range from 13 to 19 years, characterized by significant physical, psychological, and social development.

Unemployment Rates

The fraction of the whole employment population that lacks a job, however, is actively hunting for one and eager to work.

Prime Working Age

The age range, typically 25 to 54 years, considered most productive and economically active in the workforce.

Natural Rate

A term often used in economics to describe the level of output or unemployment that the economy tends toward in the long run, unaffected by short-term fluctuations.