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A firm has the capacity to produce 736,581 units of a product each year. At present, it is operating at 57 percent of capacity. The
A firm has the capacity to produce 736,581 units of a product each year. At present, it is operating at 57 percent of capacity. The firm's annual revenue is $1,017,650. Annual fixed costs are $438,867 and the variable costs are $.67 cents per unit. The following equations will be useful.
Profit = Revenue - Costs | ||
Revenue = Price each * quantity | ||
Costs = Fixed Cost + Variable Costs | ||
Variable Cost = Variable Cost per unit * number of units | ||
At the break even point, Profit = 0 |
1. What is the firm's annual profit or loss?
2. At what volume of sales does the firm break even?
Please show this in excel formula
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