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.
This posting graphically illustrates the breakeven analysis for Retread Tire Company