process plant making 5000 kg/day of a product selling for $1.75/kg has annual variable production cost of $2M at 100 % capacity and fixed costs of $700,000. What is the fixed cost per kg at the break even point ? If the selling price of the product is increased by 10%, what is the dollar increase in net profit at full capacity if the income tax rate is 35% of the gross earnings?

process plant making 5000 kg/day of a product selling for $1.75/kg has annual variable production cost of $2M at 100 % capacity and fixed costs of $700,000. What is the fixed cost per kg at the break even point ? If the selling price of the product is increased by 10%, what is the dollar increase in net profit at full capacity if the income tax rate is 35% of the gross earnings?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter9: Applications Of Cost Theory

Section: Chapter Questions

Problem 5E

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