Now that you have a beginner’s level of understanding of the manufacturing of rubber tires, prepare a report which should include answers to the following questions:
How much does it cost to manufacture tires?
oBreak down these costs by variable and fixed and break down the variable costs into direct labor, direct materials and manufacturing overhead.
What is the breakeven # of tires manufactured in a plant?
How many tires are needed to be manufactured if the company has a target net income of 10% after tax? (Assume 30% tax rate)
How would you allocate manufacturing overhead to the tires and why?
How would you deal with (under)/over applied overhead?
Explain the various reasons you may have for direct material cost variances and direct labor variances?
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