WA waste disposal company is considering getting into bio-disposal business. The incinerators cost $3750 per unit. Each unit can safely burn 2.25 tons of waste per burn and can be used for 4 burns per 8-hour day. Each unit requires 1 worker to operate the unit. Assume a labor rate of $10.25 per hour. In addition, each burn requires $104 of fuel to operate. The overhead is estimated to run $30.00 per day. The company estimates it has sufficient demand to operate 5 units of the incinerators. Each ton of waste incinerated generates $82.00 of revenue. a) What is the contribution margin to the fixed cost generated per day? Round your answer to 2 decimal places. b) How many days will it take for the company to start making a profit from the incinerators? Round your answer to 2 decimal places. c) If the company wishes to make profit after 54 days what should be the price per ton? Round your answer to 2 decimal places.
WA waste disposal company is considering getting into bio-disposal business. The incinerators cost $3750 per unit. Each unit can safely burn 2.25 tons of waste per burn and can be used for 4 burns per 8-hour day. Each unit requires 1 worker to operate the unit. Assume a labor rate of $10.25 per hour. In addition, each burn requires $104 of fuel to operate. The overhead is estimated to run $30.00 per day.
The company estimates it has sufficient demand to operate 5 units of the incinerators. Each ton of waste incinerated generates $82.00 of revenue.
a)
What is the contribution margin to the fixed cost generated per day?
Round your answer to 2 decimal places.
b)
How many days will it take for the company to start making a profit from the incinerators?
Round your answer to 2 decimal places.
c)
If the company wishes to make profit after 54 days what should be the price per ton?
Round your answer to 2 decimal places.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
