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10-A plant making 15 000 tons/year of product A has a cost data explained below: To produce 1 kg of A, 0.83 kg of raw
10-A plant making 15 000 tons/year of product A has a cost data explained below: To produce 1 kg of A, 0.83 kg of raw material B, costing 0.12 TL/kg, and 0.62 kg of raw material C, costing 0.090 TLkg, are consumed. During the production 0.4 kg of by-product D, worth of its is 0.040 TL/kg, is produced. The only utilities requirements in the plant are 600 liter of process water, 2 kWh of electricity, and 1.3 kg of steam per kg of A produced. Labor cost is 0.150 TL per kg of product. The fixed capital investment is 9.8 x 106 TL and the economic life is estimated to be 20 years. 2 x 10% TL of the required capital is borrowed from a bank at an annual interest rate of 95% for 15 years. Selling price of the product is 1.875 TL/kg. Electricity cost= 0.1 TL/kWh water cost = 0.18 TL/ton Steam cost0.15 TL/kg Calculate a) Annual manufacturing cost b) Unit production cost c) Profit at full capacity
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