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 percent of the total capital investment. The

investment is from company funds, and no interest is charged. 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 percent of the total product cost. Estimate the

following:

(a) Manufacturing cost per kilogram of product.

(b) Total product cost per year.

(c) Profit per kilogram of product before taxes.

(d) Profit per kilogram of product after taxes (use current rate)

Expert Solution

Amanda K answered 2 years ago

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