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Author Question: Trevor, the new owner of the vehicle accessory shop is considering buying sets of winter tires for ... (Read 501 times)

HudsonKB16

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Question 1

The operating budget of the Omega Twelve Company contains the following information.

Sales at 92% of capacity $644 000
Fixed costs $215 000
Variable costs 373 520588 520
Net income $55 480

a) Draw a detailed break-even chart.
b) Compute the break-even point as a percent of capacity.
c) Determine the break-even point in dollars if fixed costs are reduced by $11 200 while variable costs are changed to 62% of sales.

Question 2

Trevor, the new owner of the vehicle accessory shop is considering buying sets of winter tires for $299 per set and selling them at $520 each. Fixed costs related to this operation amount to $3 250 per month. It is expected that 18 sets per month could be sold. How much profit will Trevor make each month?


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Marked as best answer by HudsonKB16 on Jun 7, 2019

babybsemail

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