Cuff budgets sales of its truck tires at $160 per tire and estimates that 10,000 tires can be sold during the coming year.Variable costs per tire are $60 and Cuff desires a profit of $30 per tire.The target cost per tire is
A)$160.
B)$130.
C)$80.
D)$100.

Question

Quizplus · Accepted Answer

To find the target cost per tire, we need to subtract the desired profit per tire from the sales price and then subtract the variable cost per tire.

Target cost per tire = Sales price per tire - Desired profit per tire - Variable cost per tire
Target cost per tire = $160 - $30 - $60
Target cost per tire = $70

Therefore, the best choice would be B: $130, as it's the closest answer choice to our calculated target cost per tire.

Cuff Budgets Sales of Its Truck Tires at $160 Per