Breakeven analysis This analysis is made with the total production of 1000 tonne/year of azelaic acid.

Fixed cost
A fixed cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses that have to be paid by a company, independent of any business activity. In the calculation of fixed cost, insurance, advertising and cost transportation are assume to be zero for a moment Salaries

STAFF PRODUCTION MANAGER SAFETY OFFICER ENGINEER MAINTENANCE STAFF ASISTNACE TOTAL

RM 5000 3000 4000 2000 1500 4 1 4 3 8 20

TOTAL (RM) 20000 3000 16000 6000 12000 57000

= Utilities

Cooling water = 10,000 kg/hr Electrical power = 5,000 kW/day

Land

Available land: 36.7 hectar Area of land for the plant = 4 hectar Cost of land: RM19/ft2 Conversion of land area:

Cost of land:

RM 58,638,033.76

Variable cost Variable costs are expenses that change in proportion to the activity of a business. This include the labor cost, cost of equipment, energy and cost of raw material. At the moment, the energy is assume to be zero. Raw material Oleic acid 1 kg of oleic acid = RM 13.80

Oxygen 1 m3 of oxygen = RM 5.50

Equipment LIST OF EQUIPMENT RAW MATERIAL STORAGE TANK FEED TANK OZONE GENERATOR OZONE ABSORBER COOLER ELECTROSTATIC PRECIPITATOR DRIER REACTOR DISTILLATION COLUMN CRUDE TANK CRISTALIZER SEPARATOR STORAGE TANK PRODUCT STORAGE TANK BYPRODUCT/intermediate/others QUANTITY 2 1 1 1 5 1 1 1 2 1 1 1 2 2 PRICE /UNIT RM300,000.00 RM300,000.00 RM300,000.00 RM2,000,000.00 RM200,000.00 RM158,345.00 RM546,900.00 RM1,500,000.00 RM2,400,000.00 RM290,400.00 RM973,170.00 RM200,000.00 RM300,000.00 RM100,000.00 PRICE RM600,000.00 RM300,000.00 RM300,000.00 RM2,000,000.00 RM1,000,000.00 RM158,345.00 RM546,900.00 RM1,500,000.00 RM4,800,000.00 RM290,400.00 RM973,170.00 RM200,000.00 RM600,000.00 RM200,000.00 RM13,468,815.00

Labor cost

Cost of operating labor per year

RM 349,876,649.00/year

Breakeven point Price per unit = RM 43/kg

=28,672,521.76 kg

Therefore, in conclusion, the plant needs to make sales of Approximately three years payback period

before start getting profit.

Graphical method