Question
Jay Ltd sells units for Rs 4/bottle. The variable cost
for the unit per bottle is Rs.2 and has a fixed operating cost of Rs 4000 and a fixed financing cost of Rs 6000. What is Jay Ltd’s breakeven quantity of sales in units?Solution
Breakeven quantity = (fixed operating cost + fixed financing cost)/ (price – variable cost per unit) = (6000+4000) / 4-2 =10000/2 = 5000
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