Annual fixed costs are 519752 and the variable costs are 71


A firm has the capacity to produce 993,210 units of a product each year. At present, it is operating at 69 percent of capacity. The firm's annual revenue is $797,523. Annual fixed costs are $519,752 and the variable costs are $.71 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

At what volume of sales does the firm break even?

Solution Preview :

Prepared by a verified Expert
Finance Basics: Annual fixed costs are 519752 and the variable costs are 71
Reference No:- TGS02736688

Now Priced at $10 (50% Discount)

Recommended (96%)

Rated (4.8/5)