The Retread Tire Company recaps tires. The fixed annual cost of the recapping operation is $60,000. The variable cost or recapping a tire is $9.00. 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. b) Determine the annual break-even volume for the Retread Tire Company operation. c) Determine the contribution margin.
The Retread Tire Company recaps tires. The fixed annual cost of the recapping operation is $60,000. The variable cost or recapping a tire is $9.00. 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. b) Determine the annual break-even volume for the Retread Tire Company operation. c) Determine the contribution margin.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How to solve this question on excel using excel formulas?
Transcribed Image Text:The Retread Tire Company recaps tires. The fixed annual cost of the recapping operation is $60,000. The
variable cost or recapping a tire is $9.00. 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.
b) Determine the annual break-even volume for the Retread Tire Company operation.
c) Determine the contribution margin.
d) If the maximum operating capacity of the Retread Tire Company, is 8,000 tires annually, determine the
break-even volume as a percentage of that capacity.
Fixed cost
Variable cost
In the Formula, box type in the formula in words that you used
to calculate the answer.
Price=
a)
Formula:
Formula:
Formula:
TC
TR
Profit
per year
b)
tires per year
Fomula:
c)
What is the Contribution Margin?
Fomula:
d)
capacity
16
17
38
% of capacity-
Fomula:
39
40
41
42
43
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