The total capital investment for a conventional chemical plant is $2,000,000, and the plant produces 4500 tons of product annually. The selling price of the product is $0.86/kg. Working capital amounts to 18 percent of the total capital investment. The investment is from company funds, and no interest is charged. Raw-materials costs for the product are $0.11/kg, labor $0.09/kg, utilities $0.06/kg, and packaging $0.010/kg. Distribution costs are 4 percent of the total product cost. Estimate the following: (a) Manufacturing cost per kilogram of product. (b) Total product cost per year. (c) Profit per kilogram of product before taxes.
The total capital investment for a conventional chemical plant is $2,000,000, and the
plant produces 4500 tons of product annually. The selling price of the product is $0.86/kg.
Working capital amounts to 18 percent of the total capital investment. The investment is from
company funds, and no interest is charged. Raw-materials costs for the product are $0.11/kg,
labor $0.09/kg, utilities $0.06/kg, and packaging $0.010/kg. Distribution costs are 4 percent of
the total product cost. Estimate the following:
(a)
(b) Total product cost per year.
(c) Profit per kilogram of product before taxes.
(d) Profit per kilogram of product after taxes
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