The cost of a chemical plant was 5 million dollars produces a product at a rate of 20 millions kilograms per year and the selling price is 0.2 $/kg. If the cost of raw material per kg is 0.1$, the cost of utilities per kg is 0.01$ and labor cost per kg is 0.02 $. Assume that the profit after selling each kg and before taxes is 0.04$. Calculate a- the break-even point as a fraction or as a percentage of the total production capacity. b- Calculate the net profit if the taxes were 50%of the gross profit .

The cost of a chemical plant was 5 million dollars produces a product at a rate of 20 millions kilograms per year and the selling price is 0.2 $/kg. If the cost of raw material per kg is 0.1$, the cost of utilities per kg is 0.01$ and labor cost per kg is 0.02 $. Assume that the profit after selling each kg and before taxes is 0.04$. Calculate a- the break-even point as a fraction or as a percentage of the total production capacity. b- Calculate the net profit if the taxes were 50%of the gross profit .

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 7P

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