Auto Tires Inc.sells tires to service stations for an average of $45 each.The variable costs of each tire are $30 and monthly fixed manufacturing costs total $15,000.Other monthly fixed costs of the company total $12,000.Required:
a.What is the break-even level in tires?
b.What is the margin of safety assuming sales total $90,000?
c.What is the break-even level in tires assuming variable costs increase by 20 percent?
d.What is the break-even level in tires assuming the selling price goes up by 10 percent, fixed manufacturing costs decline by 10 percent and other fixed costs decline by $150?

Question

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The Answer of Auto Tires Inc.sells tires to service stations for an average of $45 each.The variable costs of each tire are $30 and monthly fixed manufacturing costs total $15,000.Other monthly fixed costs of the company total $12,000.Required:
a.What is the break-even level in tires?
b.What is the margin of safety assuming sales total $90,000?
c.What is the break-even level in tires assuming variable costs increase by 20 percent?
d.What is the break-even level in tires assuming the selling price goes up by 10 percent, fixed manufacturing costs decline by 10 percent and other fixed costs decline by $150?