A 1,500,000 SF plant employs 300 people and produces 177,000 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 $4,000,000 per month and variable costs of $90 per LCD panel. What is the total operating cost for the plant per YEAR? Express your answer in $ to the nearest $1 million.

Question

Harry

Business

9 November, 02:09

A 1,500,000 SF plant employs 300 people and produces 177,000 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 $4,000,000 per month and variable costs of $90 per LCD panel. What is the total operating cost for the plant per YEAR? Express your answer in $ to the nearest $1 million.

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Answers (1)

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Geovanni Waters · Answer 1

The total operating cost for the plant per YEAR is $225,000,000.

Explanation:

Fixed cost = $4,000,000 for month

Variable cost = $90 per LCD panel.

Total LCD panels produced in a month = $ 177,000.

Total operating cost = Fixed cost + variable cost

= 12*4,000,000 + 10*177,000*100

= 48,000,000 + 177,000,000

= $225,000,000

Therefore, The total operating cost for the plant per YEAR is $225,000,000.