Mountain Aquaculture and Producers Association (MA&PA) is a small trout producers' cooperative in West Virginia. Its main product is boned, head-removed trout sold to local stores. Unfortunately, the cooperative has not made any profit since it was started in 1992 and has to rely on donations and government grants. The manager wants to know under what circumstances MA&PA would make a profit. The building was constructed in 1992 for $49,000, and the processing equipment cost $37 ,500. The utilities cost $6,800 per year, and the building tax is $1, 100 per year.

A pound of whole trout cost $1.40, and the yield is 60 percent (i.e., to make one pound of processed trout, 1.67 pound of whole trout is needed). It takes a worker 12 minutes to produce one pound of processed trout. The wage rate, including benefits, is $7.80 per hour. The total cost of processing supplies, advertising, and delivery is $1 per pound of processed trout. The processed trout is sold for $6.00 per pound. Use straight-line depreciation and life of 20 years for the building and 10 years for the processing equipment.

a. Calculate the total annual fixed cost.

b. Calculate the variable cost per pound of processed trout.

c. Calculate the break-even quantity for the number of pounds of processed trout sold per year.

d. What is the minimum amount of processed trout that the cooperative must sell per year in order to make any profit?