If ‘F’ is the fixed cost, ‘V’ is the variable cost per unit (or total variable costs) and ‘P’ is the selling price of each unit (or total sales value), then break-even point is equal to
A. $$\frac{{{\text{F}} \times {\text{V}}}}{{\text{P}}}$$
B. $$\frac{{{\text{F}} \times {\text{P}}}}{{\text{V}}}$$
C. $$\frac{{\text{F}}}{{1 + \frac{{\text{V}}}{{\text{P}}}}}$$
D. $$\frac{{\text{F}}}{{1 - \frac{{\text{V}}}{{\text{P}}}}}$$
Answer: Option D
Solution (By Examveda Team)
If ‘F’ is the fixed cost, ‘V’ is the variable cost per unit (or total variable costs) and ‘P’ is the selling price of each unit (or total sales value), then break-even point is equal to $$\frac{{\text{F}}}{{1 - \frac{{\text{V}}}{{\text{P}}}}}.$$This Question Belongs to Mechanical Engineering >> Industrial Engineering And Production Management
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