Question

A plant has an annual fixed cost of Rs. 1, 00,000 and a variable cost of Rs. 2000. If the product can be sold for Rs 3000, the break even quantity is

Answer 1

Answer:

Break Even quantity = 100

Step-by-step explanation:

A plant has an annual fixed cost of Rs. 1, 00,000 and a variable cost of Rs. 2000. If the product can be sold for Rs 3000, the break even quantity is

Let say B is the Break even quantity

Fixed Cost = Rs 100000

Variable cost for B products = 2000B  Rs

Total Cost = 100000 + 2000B  Rs

Selling Price for B products = 3000B

Selling Price = Total cost ( including Fixed Cost)

=> 3000B  = 2000B + 100000

=> 1000B = 100000

=> B = 100

Break Even quantity = 100