A process plant making 5000 kg/day of a product selling

for $1.75/kg has annual variable production costs of $2

million at 100% capacity and fixed costs of $700,000.

a)

At what capacity fraction will the breakeven occur.

b)

What is the fixed cost/kg at the break even point?

c)

If the selling price of the product is increased by

10%, what is $ increase in net profit at full capacity

at income tax rate of 35%.