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Francois French manufactures cheese, which he normally sells at 20/kg, on which sales commission of 5% is paid. Plant capacity is 7,500 kg/month. Income tax
Francois French manufactures cheese, which he normally sells at 20/kg, on which sales commission of 5% is paid. Plant capacity is 7,500 kg/month. Income tax is levied at 30%.
Fixed costs | Costs per kg. | ||
Plant depreciation | 8,000 | Direct materials | 4 |
Other plant costs | 15,000 | Direct labor | 2 |
Corporate salaries | 10,000 | Var. factory O/H | 3 |
Advertising | 3,000 |
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The number of kilograms to sell to break-even is:
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