A food processing plant has fixed charges, overhead, and general expenses equal to $ 3,000,000 and they are independent of production rate. The variable cost of the plant equals to 40% of the total annual sales. Currently the plant operates at 75% capacity and has total annual sales of $ 8,000,000. The selling price is 10 $/kg, and the income tax is 30%. Calculate: a) the production rate at breakeven point; b) net profit at full capacity

A food processing plant has fixed charges, overhead, and general expenses equal to $ 3,000,000 and they are independent of production rate. The variable cost of the plant equals to 40% of the total annual sales. Currently the plant operates at 75% capacity and has total annual sales of $ 8,000,000. The selling price is 10 $/kg, and the income tax is 30%. Calculate: a) the production rate at breakeven point; b) net profit at full capacity

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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