In a factory, the cost of production is partially fixed and partially variable, depending on the number of
units produced. When 540 units are produced, the cost of production is Rs. 2,02,160 and if 1,080 units
are produced, then the cost of production is Rs. 2,04,320. How many units were produced if the total
cost of production is Rs. 2,08,640?
Answers
Given : the cost of production is partially fixed and partially variable, depending on the number of units produced. When 540 units are produced, the cost of production is Rs. 2,02,160 and if 1,080 units
are produced, then the cost of production is Rs. 2,04,320
To Find : How many units were produced if the total cost of production is Rs. 2,08,640
solution:
Fixed Cost = C
Variable Cost = X
When 540 units are produced
Cost = 540X + C = 202160 Eq1
When 1080 units are produced
Cost = 1080X + C = 2,04,320 Eq2
Eq2 - Eq1
=> 540X = 2,160
=> X = 4
Variable Cost = X = Rs 4 per Unit
540X + C = 202160
=> 540 × 4 + C = 202160
=> C = 200000
Fixed Cost = C = 200000
total cost of production is Rs. 2,08,640
Units produced = N
=> 4N + 200000 = 2,08,640
=> 4N = 8,640
=> N = 2,160
2160 units were produced if the total cost of production is Rs. 2,08,640
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