The Retread Tire Company and The Evergreen Fertilizer Company
1. The Retread Tire Company recaps tires. The fixed annual cost of the recapping operation is $60,000. The variable cost of recapping a tire is $9. The company charges $25 to recap a tire.
a. For an annual volume of 12,000 tires, determine the total cost, total revenue, and profit.
b. Evaluate the annual break-even volume for the Retread Tire Company operation.
2. The Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for @0.40 per pound. Determine the monthly break-even volume for the company.