Fixed cost of a new product is Rs 18000 and variable cost per unit is Rs 550. If demand function is p(x) = 4000-150x , then the break even values are :
Answers
Answer:
8 or 9 is the answer
Step-by-step explanation:
The break-even values are:
he break-even values are:Break-even quantity = 60 units
he break-even values are:Break-even quantity = 60 unitsBreak-even price = Rs 1,100 per unit
Given:
Fixed cost (FC) = Rs 18,000
Variable cost per unit (VC) = Rs 550
Demand function p(x) = 4000-150x
To find:
Break-even values
Solution:
The break-even point is the level of sales at which the total revenue is equal to the total cost. In other words, the break-even point is where the profit is zero. We can use the following formula to calculate the break-even point:
Break-even point (BEP) = FC / (p(x) - VC)
Substituting the values we get:
BEP = 18000 / (4000 - 150x - 550)
Simplifying the above equation we get:
BEP = 18000 / (3450 - 150x)
Now we can equate the demand function p(x) with the price (p) and substitute the price (p) in the above equation to get the break-even quantity:
p(x) = 4000 - 150x
p = 4000 - 150x
x = (4000 - p) / 150
Substituting the value of x in the above equation we get:
BEP = 18000 / [3450 - 150(4000 - p) / 150]
Simplifying the above equation we get:
BEP = 18000 / [3450 - 4000 + p]
BEP = 18000 / (p - 550)
Therefore, the break-even values are:
Break-even quantity = 60 units
Break-even price = Rs 1,100 per unit
In order to make a profit, the company needs to sell more than 60 units at a price higher than Rs 1,100 per unit. If the company sells less than 60 units or sells at a price lower than Rs 1,100 per unit, it will incur a loss.
The break-even analysis helps the company to determine the minimum level of sales required to cover all the costs and make a profit.
To learn more about demand from the given link.
https://brainly.in/question/11137023
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