If a businesss fixed cost are textsterling5, 000, its price per unit is textsterling25, and its variable cost per unit is textsterling17, what is the break-even output?

BREAK EVEN POINT

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

If a business’s fixed cost are £5, 000, its price per unit is £25, and its variable cost per unit is £17, what is the break-even output?

A	625 units
B	200 units
C	215 units
D	605 units
E	295 units

Explanation:

Detailed explanation-1: -Calculate fixed cost per unit by dividing the total fixed cost by the number of units for sale. Example: ABC Dolls has 6, 000 dolls available for customer purchase. To determine the average fixed cost, divide $85, 200 (the total fixed cost) by 6, 000 (the number of units for sale).

Detailed explanation-2: -In some cases, businesses only list their total costs and variable costs per unit. You can use this information to determine your fixed costs with the formula: Fixed Cost = Total Cost – (Variable Cost Per Unit * Units Produced).

Detailed explanation-3: -Solution(By Examveda Team) Fixed cost per unit changes according to volume of production. A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold.

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ECONOMICS

COST ACCOUNTING

BREAK EVEN POINT