Topic: Industrial Engineering
If the selling price is Rs. 300/unit, variable cost is Rs. 200/unit, and fixed cost is Rs. 50,000, what is the break-even quantity?
- A. 100 units
- B. 150 units
- C. 200 units
- D. 500 units
Answer: D. 500 units
Explanation: Break-even quantity is achieved when total revenue equals total costs.
Break-even Quantity = $\frac{\text{Fixed Cost}}{\text{Selling Price per unit} - \text{Variable Cost per unit}}$.
BEQ = $\frac{50000}{300 - 200} = \frac{50000}{100} = 500$ units.