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A producer of chairs is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $10000 per month and a variable costs of 1.30 cents per unit produced. Each item is sold to the retailers at a price that averages 1.50 cents per unit.
What volume per month is required to break even?
What profit would be realized on a monthly volume of 45000 units?
What volume is needed to obtain a profit of $25000 per month?
What volume is needed to provide a revenue of $13000 per month
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Does the company have a social responsibility to factor into its decision the impact that its move would have on the city? Explain your reasoning.
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