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Break-even point, gross earnings, and net
profit for a process plant
The annual direct production costs for a plant operating at 70 percent
capacity are $280,000 while the sum of the annual fixed charges,
overhead costs, and general expenses is $200,000. What is the break-
even point in units of production per year if total annual sales are
$560,000 and the product sells at $40 per unit? What were the annual
gross earnings and net profit for this plant at 100 percent capacity in
1988 when corporate income taxes required a 15 percent tax on the
first $50,000 of annual gross earnings, 25 percent on annual gross
earnings of $50,000 to $75,000, 34 percent on annual gross earnings
above $75,000, and 5 percent on gross earnings from $100,000 to
$335,000?
CEE 12.pptx
CEE 12.pptx
CEE 12.pptx
CEE 12.pptx

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CEE 12.pptx

  • 1. Break-even point, gross earnings, and net profit for a process plant The annual direct production costs for a plant operating at 70 percent capacity are $280,000 while the sum of the annual fixed charges, overhead costs, and general expenses is $200,000. What is the break- even point in units of production per year if total annual sales are $560,000 and the product sells at $40 per unit? What were the annual gross earnings and net profit for this plant at 100 percent capacity in 1988 when corporate income taxes required a 15 percent tax on the first $50,000 of annual gross earnings, 25 percent on annual gross earnings of $50,000 to $75,000, 34 percent on annual gross earnings above $75,000, and 5 percent on gross earnings from $100,000 to $335,000?