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.
This Question Belongs to Mechanical Engineering >> Industrial Engineering And Production Management
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