The retread tire company recaps tires. the fixed annual cost of the recapping operation is $65,000. the variable cost of recapping a tire is $7.5. the company charges$25 to recap a tire.
a. for an annual volume of 15, 000 tire, determine the total cost, total revenue, and profit. b. determine the annual break-even volume for the retread tire company operation.

Part a) Total Cost

Total Cost for recapping the tires is the sum of fixed cost and the variable cost. i.e.

The total cost is ( $65,000 fixed) + (15,000 x $7.5)

=$65,000+$112,500

=$177,500  

Part b) Total Revenue

Revenue from 1 tire = $25

Total tires recapped = 15000

So, Total revenue = 15000 tires x $25/tire

Total Revenue =$375,000  

Part c) Total Profit

Total Profit = Revenue - Cost

Using the above values, we get:

Profit = $375,000 - $177,500

Profit = $197,500  

Part d) Break-even Point

Break-even point point occurs where the cost and the revenue of the company are equal. Let the break-even point occurs at x-tires. We can write:

For break-even point

Cost of recapping x tires = Revenue from x tires

65,000 + 7.5 x = 25x

65,000 = 17.5 x

x = 3714 tires

Thus, on recapping 3714 tires, the cost will be equal to the revenue generating 0 profit. This is the break-even point.

17

step-by-step explanation:

the slope of the line is 60

one point on the line is (40,10)

step-by-step explanation:

in the equation outside the parenthesis the equation always tells you the slope. in this case it is 60.

in the parenthesis is also says 40 which is x because it is near the x and 10 is y because it is near y.