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Graphical illustration of breakeven analysis

The Retread Tire Company recaps tires. The fixed annual cost of the recapping operation is \$60,000. The variable cost of recapping a tire is is \$9. The company charges \$25 to recap a tire.

A. For an annual volume of 12,000 tires, determine the total cost, total revenue, and profit.
A. Formula is : Total cost = Fixed Cost + Total Variable Cost * Fixed Cost-60,000
*Total Variable Cost= 108,000 ( 9 x 12,000)
*Total Cost= 168,000 (108,000+60,000)
* Profits- 132,000 (300,000 -168,000)
*Total Revenue- 300,000 ( 12,000 x 25)
Answer: The total cost is 168,000, the total revenue is 300,00, and the profit is 132,000.

B. Determine the annual break even volume for Retread Tire Company operation.
B. Answer: The break even volume for retread Tire Company operation is 3750 because you subtract 9-25, then divide it by 60,000= 3750. So the break even volume is 3750.

I have all of that- but this is the problem below I need the answer to:
Graphically illustrate the break even volume for the Retread Tire Company determined in the problem above.

Solution Summary

This posting graphically illustrates the breakeven analysis for Retread Tire Company

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