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A firm has the capacity to produce 975,510 units of a product each year. At present, it is operating at 39 percent of capacity. The firm's annual revenue is $648,796. Annual fixed costs are $384,407 and the variable costs are $.46 cents per unit. The following equations will be useful.
Profit = Revenue - CostsRevenue = Price each * quantityCosts = Fixed Cost + Variable CostsVariable Cost = Variable Cost per unit * number of unitsAt the break even point, Profit = 0
At what volume of sales does the firm break even?
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