"What is the company's breakeven point:
Selling price - Rs 6 per unit
Variable production cost - Rs 1.20 per unit
Variable selling cost - Rs 0.40 per unit
Fixed production cost - Rs 4 per unit
Fixed selling cost - Rs 0.80 per unit
Budgeted production and sales for the year are 10,000 units.
"
A. 8,000 units
B. 8,333 units
C. 10,000 units
D. 10,909 units
Answer: Option D
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Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
Cal fixed cost =4*10000+.80*10000=48000
Cal variable cost p.u =1.20+.40=1.60
Cal contribution p.u =sales-vc p.u
6-1.60=4.40 cont. P.u
Cal BEP unit =fc/cont. P.u
BEP unit sales=48000/4.40=10909