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    				| 1. | A company produces a commodity with ₹ 24,000 as fixed cost. The variable cost estimated to be 25% of the total revenue received on selling the product, is at the rate of ₹ 8 per unit. Find the break-even point. | 
| Answer» Suppose that x number of the unit be produced and sold. As each unit’s variable cost is 25% of revenue The variable cost of x units = 25 % of ₹ 8x = ₹ 2x Total cost of producing x units C(x) = TFC + TVC = ₹(24000 + 2x) Price of one unit = ₹ 8 Total revenue of selling x units = R(x) = ₹ 8x At break-even values, C(x) = R(x) ⇒ 24000 + 2x = 8x ⇒ 24000 = 6x ⇒ x = 4000 | |