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A process plant making 4000 tons per year of a product selling for $0.80 per kg has annual direct production costs of $2 million at 100 percent capacity and other fixed costs of $700,000.
i. Construct the break-even chart for the process.
ii. Determine the break-even point and the fixed cost per kg at it.
iii. If the selling price of the product is increased by 10%, what is the increase in net profit at full capacity if the income tax rate is 48% of the gross earnings?
What geographic area would the market area typically considered be? How would quantity demanded and the price of this product be measured?
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