Question

40) Given selling price is Rs 10 per unit, variable cost is Rs 6 per unit and fixed cost is Rs 5,000. What is break-even point?

a) 500 units

b) 1,000 units

c) 1,250 units

d) 750 units

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Answer 1

Answer:

a

Step-by-step explanation:

500 units is the correct answer

Answer 2

Answer:

The breakeven point is 1250 units.

given:

selling price of the product = rupees  10 per unit

Variable cost of the product = 6 rupees per unit.

Fixed cost  = 5000 Rupees

To Find :

Find the breakeven point of the business.

Step-by-step explanation:

Break Even point:

Break even point is the point or quantity of production ,  where the cost of production of that much quantity is equal to the revenue of that much of the quantity of the products . This is due to the involvement of the fixed cost. After surpassing the breakeven point , the profit is going to made , below the breakeven point , there will be loss to the business.

Breakeven point = (fixed cost )/ (contribution margin)

                            =Fixed cost/ ( Selling price - variable cost)

                            =5000/(10-6)

                            =5000/4

                            =1250 units.

hence after producing 1250 units  , the profit is going to start, below 1250 units there will be loss.

Hence the breakeven point is 1250 units.