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A Plant Producing Hydrogen Has a Fixed Overhead Of $10,000,000\$ 10,000,000

Question 30

Short Answer

A plant producing hydrogen has a fixed overhead of $10,000,000\$ 10,000,000 per year and incurs a variable cost of $40.00\$ 40.00 per ton. The average selling price is $90.00\$ 90.00 per ton.
(A) What is the breakeven volume for this plant?
(B) What is the total sales revenue that will produce a net contribution of $2,000,000\$ 2,000,000 ?
(C) What is the number of units produced by the plant in 2004, if its net contribution during 2004 is $3,000,000\$ 3,000,000 ?
(D) If production is 250,000 tons in 2003 and 150,000 tons in 2003, what is the net contribution during 2002 and 2003 combined?

Correct Answer:

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(A) 200,000 tons
(B)...

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