Chemical Engineering - Chemical Engineering Basics - Discussion

Discussion Forum : Chemical Engineering Basics - Section 25 (Q.No. 2)
2.
For a small scale toy factory, the fixed cost per month is Rs. 5000/-. The variable cost per toy is Rs. 20 and sales price is Rs. 30 per toy. The break even production per month will be __________ toys.
250
500
1000
3000
Answer: Option
Explanation:
No answer description is available. Let's discuss.
Discussion:
2 comments Page 1 of 1.

Amit Kumar said:   11 months ago
The break-even point is the point where the total revenue is equal to the total cost, i.e., where there is no profit or loss.

Let's assume that the number of toys produced per month is x.

Total Cost (TC) = Fixed Cost (FC) + Variable Cost (VC) = Rs. 5000 + (Rs. 20 * x).
Total Revenue (TR) = Selling Price (SP) * Quantity (Q) = Rs. 30 * x.

At the break-even point, TC = TR, therefore:
Rs. 5000 + (Rs. 20 * x) = Rs. 30 * x,
Rs. 5000 = Rs. 10 * x,
x = 5000/10.
(2)

TANMAY SHAH said:   2 years ago
Please anybody explain the calculation of the answer.
(1)

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