# 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.

Discussion:

2 comments Page 1 of 1.
TANMAY SHAH said:
2 years ago

Please anybody explain the calculation of the answer.

(1)

Amit Kumar said:
1 year 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.

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)

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