Question : If the fixed cost of the factory producing candles is Rs. 20,000, the selling price is Rs. 30 per dozen candles, and the variable cost is Rs. 1.50 per candle, what is the Break-even Quantity?
Option 1: 20,000
Option 2: 10,000
Option 3: 15,000
Option 4: 12,000
New: SSC CHSL Tier 2 answer key released | SSC CHSL 2024 Notification PDF
Recommended: How to crack SSC CHSL | SSC CHSL exam guide
Don't Miss: Month-wise Current Affairs | Upcoming government exams
Correct Answer: 20,000
Solution : The correct option is 20,000 .
The Break-even quantity is the level of production at which total cost equals total revenue. It can be calculated by using the following formula:
In this case:
Fixed Cost = Rs. 20,000 Selling Price per dozen candles = Rs. 30 Variable Cost per candle = Rs. 1.50
First, let's convert the selling price per dozen candles to the price per candle:
Selling Price per candle = Rs. 30/12 candles = Rs. 2.50 per candle
Break-even quantity = 20,000/(2.50 - 1.50)
Break-even quantity = 20,000/1
Break-even quantity = 20,000
Related Questions
Know More about
Staff Selection Commission Combined High ...
Result | Eligibility | Application | Admit Card | Answer Key | Preparation Tips | Cutoff
Get Updates Brochure
Your Staff Selection Commission Combined Higher Secondary Level Exam brochure has been successfully mailed to your registered email id “”.
