A process plant making 5000kg /day of a product selling for $1.75 per kg has annual direct production costs of $2 million at 100 percent capacity and other fixed costs of $700,000. What is the fixed charge per kg at the break-even point? If the selling price of the product is increased by 10 percent, what is the dollar increase in net profit at full capacity if the income tax rate is 35 percent of gross earnings?
A process plant making 5000kg /day of a product selling for $1.75 per kg has annual direct production costs of $2 million at 100 percent capacity and other fixed costs of $700,000. What is the fixed charge per kg at the break-even point? If the selling price of the product is increased by 10 percent, what is the dollar increase in net profit at full capacity if the income tax rate is 35 percent of gross earnings?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A process plant making 5000kg /day of a product selling for $1.75 per kg has annual direct
production costs of $2 million at 100 percent capacity and other fixed costs of $700,000. What is
the fixed charge per kg at the break-even point? If the selling
10 percent, what is the dollar increase in net profit at full capacity if the income tax rate is 35
percent of gross earnings?
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