PRC-2 · Chapter 2 · Question 8 of 45
A firm sells a product for Rs. 30 per unit. The variable cost is Rs. 20 per unit, and total fixed costs are Rs. 50,000. What is the break-even volume of sales in units?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 5,000 units
Explanation
Break-even occurs when Total Revenue equals Total Cost: 30x = 20x + 50,000. Solving for x leaves 10x = 50,000, meaning x = 5,000 units.
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