Two alternatives can produce a product. First have a fixed cost of Rs…

Question

Two alternatives can produce a product. First have a fixed cost of Rs. 2000 and a variable cost of Rs. 20 per piece. The second method has a fixed cost of Rs. 1500 and a variable cost of Rs. 30. The break even quantity…

Accepted Answer

Option B. 50. Answer & Solution Answer: Option B Solution: Equation we use: Fixed cost/sales cost - variable cost = Q (BEP). 2000+ 20*X = 1500+ 30*X. 500 = 10*X. Here the break-even quantity is: x= 50 units.

Two alternatives can produce a product. First have a fixed cost of Rs. 2000 and a variable cost of Rs. 20 per piece. The second method has a fixed cost of Rs. 1500 and a variable cost of Rs. 30. The break even quantity between the two alternatives is

Solution