Problem:
The Retread Tire Company recaps tires. The fixed annual cost of the recapping operation is $60,000. The variable cost ofrecapping a tire is $9. The company charges $25 to recap a tire.
Required:
Question 1) For an annual volume of 12,000 tires, determine the total cost, total revenue, and profit.
Question 2) Determine the annual break-even volume for the Retread Tire Company operation.
Solve the problem and show all work.