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Annual capacity of a plant producing phenol is 100 metric tons. Phenol sells at INR 200per kg , and its production cost is 200per kg . The sum of annual fixed charges, overhead costs and general expenses is
INR 30, 00, 000. Taxes are payable at 18 % on gross profit. Assuming the plant runs at full capacity ad that all the phenol produced is sold, the annual net profit of the plant (in INR) is
Options
- A.98, 40, 000
- B.1, 50, 00, 000
- C.1, 20, 00, 000
- D.1, 39, 40, 000
Answer
ASolution
Annual Production capacity= 100 metric ton
Taxes = 18 % of gross profit
Annual net profit of the plant = Gross profit after tax
Hence, the correct option is (A)
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Source PDF:
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