Please illustrate me the steps involved to resolve the problems described below:
Question 1: For a given operation the fixed costs are 4,000,000. The semi-variable costs are 20% of the fixed costs plus $5.20 per unit. The variable costs are $16.00 per unit. The business unit is looking for a 15% markup. If the units sell for $28.00 per unit, what is the break-even point and the shut down point for production. Draw the cost graph for this operation and calculate the points requested.
Question 2: Estimate the manufacturing cost to produce 1.5 million gallons per year of paint. The plant operates 16 hours per day about 300 days per year and costs $15,000,000 to build. In producing the product, about ½ gallon of ingredient "A" costing $3 per gallon and 2 gallons of ingredient "B" costing $2 per gallon is produced. In addition about ½ gallon of by-product worth $.30 per gallon is produced. The plant has average maintenance problems and requires average supervision. Utility costs are approximately $1.80 per gallon of product produced. There are no interest charges or royalties. The waste disposal charges are $.50 per gallon of product produced.