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Discussion :: Industrial Engineering and Prod'n Mgmt

  1. 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

    2. A.

     25
    B.

     50
    C.

     75
    D.

     100

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    Workspace

    View Answer

    Answer : Option B

    Explanation :

    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.

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