Question

6. BEP (15 pts) The world price of Zinc has increased to the point where "moth balled" zinc mines in East Tennessee have been reopened because of their potential profitability. a. What is the breakeven point when zinc sells for $1.00 per pound? There are variable costs of $30 million at 100% capacity (20,000 tons) and fixed costs of $17 million per year. b. What is the estimated annual profit for a mine producing 20,000 tons per year (which is 100% capacity)? c. If production is only 15,000 tons per year, will the mine be profitable? What is the profit or loss at this production level? Note: 1 ton = 2,000 pounds

          6. BEP (15 pts)
The world price of Zinc has increased to the point where "moth balled" zinc mines in East Tennessee have been reopened because of their potential profitability.
a. What is the breakeven point when zinc sells for $1.00 per pound? There are variable costs of $30 million at 100% capacity (20,000 tons) and fixed costs of $17 million per year.
b. What is the estimated annual profit for a mine producing 20,000 tons per year (which is 100% capacity)?
c. If production is only 15,000 tons per year, will the mine be profitable? What is the profit or loss at this production level?

Note: 1 ton = 2,000 pounds

Show more…

6. BEP (15 pts)
The world price of Zinc has increased to the point where "moth balled" zinc mines in East Tennessee have been reopened because of their potential profitability.
a. What is the breakeven point when zinc sells for 1.00 per pound? There are variable costs of30 million at 100% capacity (20,000 tons) and fixed costs of $17 million per year.
b. What is the estimated annual profit for a mine producing 20,000 tons per year (which is 100% capacity)?
c. If production is only 15,000 tons per year, will the mine be profitable? What is the profit or loss at this production level?

Note: 1 ton = 2,000 pounds

Added by Sofia J.

Calculus: Early Transcendentals

James Stewart 8th Edition

Instant Answer

Solved by Expert Supreeta N

08/22/2023

Step 1

First, we need to find the variable cost per pound of zinc. We know that the variable cost is $30 million at 100% capacity (20,000 tons). Variable cost per ton = $30,000,000 / 20,000 tons = $1,500 per ton Since there are 2,000 pounds in a ton, the variable cost Show more…

Show all steps

lock

Thanks for your feedback!

6. BEP (15 pts) The world price of Zinc has increased to the point where "moth balled" zinc mines in East Tennessee have been reopened because of their potential profitability. a. What is the breakeven point when zinc sells for $1.00 per pound? There are variable costs of $30 million at 100% capacity (20,000 tons) and fixed costs of $17 million per year. b. What is the estimated annual profit for a mine producing 20,000 tons per year (which is 100% capacity)? c. If production is only 15,000 tons per year, will the mine be profitable? What is the profit or loss at this production level? Note: 1 ton = 2,000 pounds

Play audio

Feedback

Powered by NumerAI

Supreeta N and 57 other subject Calculus 1 / AB educators are ready to help you.

Ask a new question

Labs

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs

Key Concepts

Recommended Videos

Recommended Textbooks

Transcript

Ace is your personal tutor. It breaks down any question with clear steps so you can learn.

Start Using Ace

Continue solving this problem

Create a free account to:

View full step-by-step solution
Ask follow-up questions with Ace AI
Save progress and study later