Question

5. ABC Ltd. Has fixed costs of 60,000 p.a.. It manufactures a single product, which it sells for 20 per unit.
Its contribution to sales ratio is 40%. ABC Ltd's break-even point in units is : sts of
(A) 3,000
(B) 2,000
(C) 5,000
(D) 7,500​

Answer 1

Answer:

7500 is the correct ans.

first calculate contribution = Sale price x pv ratio

20×40%=8

Divide Fixed cost by Contribution per unit

BEP(units)= 60000÷8= 7500

Answer 2

Answer:

(D) 7,500

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