Question
Sala pipe fittings produce pipe elbows and reducers from stainless steel. The company can process up to 20 000 tonnes of stainless-steel sheets in a
Sala pipe fittings produce pipe elbows and reducers from stainless steel. The company can process up to 20 000 tonnes of stainless-steel sheets in a year. The company pays the steel company $800 per tonne of stainless-steel sheets and each tonne is used to manufacture $2000 worth of elbows and reducers. Variable processing costs are $470 per tonne and fixed processing costs $3.4 million per year at all production levels. Administrative overhead is $3 million per year regardless of the volume of the production. Marketing and transportation costs work out to be $230 per tonne. In order to attain a net income of $2.4 million how many tonnes of steel must be processed this year?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started