Question 2 1 pts A 1,500.000 SF plant employs 300 people and produces 233,000 LC

Question

Question 2 1 pts A 1,500.000 SF plant employs 300 people and produces 233,000 LCD panel per month. The plant is idle, on average, 2 months each year for maintenance, repairs, and retooling. The plant has fixed costs of $5,000,000 per month and variable costs of $70 per LCD panel. What is the total operating cost for the plant per YEAR? Express your answer in $ to the nearest $1 million. Question 3 1 pts A mill producing steel plate has fixed costs of $100,000 per week and variable costs of $0.15 per pound of steel plate produced.If the steel plate sells for $0.77 per pound, how many pounds must be produced each week for the plant to breakeven? Express your answer in pounds to the nearest 1,000 pounds.

Explanation / Answer

Question 2

The plant remains idle for two months.

So, production takes place for 10 months.

Production per month = 233,000 LCD panels

Total production in 10 months = 233,000 * 10 = 2,330,000 LCD panels

Variable cost per LCD panel = $70

Total variable cost = Total production in 10 months * Variable cost per LCD panel

Total variable cost = 2,330,000 * $70 = $163,100,000

The plant has fixed cost of $5,000,000 per month.

Fixed cost have to be incurred whether production takes place or not.

So, fixed cost will be for the whole year.

Total fixed cost = 5,000,000 * 12 = $60,000,000

Calculate the total operating cost -

Total operating cost = Total fixed cost + Total variable cost = $163,100,000 + $60,000,000 = $233,100,000

So,

The total operating cost for the plant per year is $233 million.

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