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
A. 25
B. 50
C. 75
D. 100
Answer: Option B
Solution(By Examveda Team)
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.
Related Questions on Industrial Engineering and Production Management
The essential condition for the decompression of an activity is that
A. The project time should change due to decompression
B. After decompression the time of an activity invariably exceeds its normal time
C. An activity could be decompressed to the maximum extent of its normal time
D. None of the above
A. CAM < DAM
B. CAM > DAM
C. CAM = DAM
D. There is no such criterion
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