At present, it is op- $504,000. Annual fi- $0.392 per unit of pr а. What is the fir b. At what volun

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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C or prouuctiol 13 INCIeaseu.
15.
A certain firm has the capacity to produce 840,000 units of product per year.
At present, it is operating at 60% of capacity. The firm's annual income is
$504,000. Annual fixed costs are $212,000, and the variable costs are equal to
$0.392
unit of product.
What is the firm's annual profit or loss? Answer: $94,432 profit
b.
per
а.
At what volume of sales does the firm break even?
What will be the profit or loss at 75%, 85%, and 90% of capacity on the
basis of constant income per unit and constant variable cost per unit?
bas c.
Transcribed Image Text:C or prouuctiol 13 INCIeaseu. 15. A certain firm has the capacity to produce 840,000 units of product per year. At present, it is operating at 60% of capacity. The firm's annual income is $504,000. Annual fixed costs are $212,000, and the variable costs are equal to $0.392 unit of product. What is the firm's annual profit or loss? Answer: $94,432 profit b. per а. At what volume of sales does the firm break even? What will be the profit or loss at 75%, 85%, and 90% of capacity on the basis of constant income per unit and constant variable cost per unit? bas c.
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