The total capital investment for a conventional chemical plant is $1,500,000 and the plant produces 3...

The total capital investment for a conventional chemical plant is $1,500,000 and the plant

produces 3 million kg of product annually. The selling price of the product is $0.82/kg.

Working capital amounts to 15% of the total capital investment. The investment is from

company funds and no interest is charged. Delivered raw materials costs for the product

are $0.09/kg; Labor, $0.08/kg; utilities, $0.05/kg and packaging, $0.008/kg. Distribution

costs are 5% of the total product cost. Estimate a) the manufacturing cost per kg of

product; (b) total product cost per year; (c) Profit per kg of product before taxes and (d)

profit per kg of product after income taxes at 35% of gross profit.

Expert Solution

Amanda K answered 2 years ago

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