A firm has the capacity to produce 1,208,410 units of a product each year. At...
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A firm has the capacity to produce 1,208,410 units of a product each year. At present, it is operating at 76 percent of capacity. The firm's annual revenue is $1,218,270. Annual fixed costs are $420,710 and the variable costs are $.45 cents per unit. The following equations will be useful.
| Profit = Revenue - Costs | ||
| Revenue = Price each * quantity | ||
| Costs = Fixed Cost + Variable Costs | ||
| Variable Costs = Fixed Cost + (cost each * quantity) | ||
| At the break even point, Profit = 0 |
What is the firm's annual profit or loss?
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