6. The \( O \) \& \( O \) Manufacturing Company believes they can sell 5,000 steel buildings for \( \$ 1,500 \) each. If the variable costs are \( \$ 1,225 \) per building and the fixed costs are \( \$ 1,000,000 \), (A) would they make a profit and (B) if so, how much?

To find out if the \( O \) \& \( O \) Manufacturing Company would make a profit, we first need to determine the total revenue and total costs. The total revenue from selling 5,000 buildings at \( \$ 1,500 \) each is \( 5,000 \times 1,500 = \$ 7,500,000 \). Next, the total variable costs would be \( 5,000 \times 1,225 = \$ 6,125,000 \). Adding the fixed costs of \( 1,000,000 \), the total costs amount to \( 6,125,000 + 1,000,000 = \$ 7,125,000 \). Now, subtract total costs from total revenue: \( 7,500,000 - 7,125,000 = \$ 375,000 \). So they would indeed make a profit of \( \$ 375,000 \). They can also consider scaling up to increase profits, but it's crucial to keep an eye on market demand. With production ramp-up, they may face increased variable costs or potential market saturation. Always run a risk assessment to avoid pitfalls!