Question

Sale price = Rs. 50/unit, Variable cost = Rs. 30/unit, Fixed cost = Rs. 20000. Find units to earn Rs. 5000 profit.

• A. 1000 units
• B. 800 units
• C. 1250 units
• D. 700 units

Hint:

Break-even units + desired profit = (Fixed cost + Profit)/(Price - Variable cost)

Answer 1

The Correct Option is C

Step 1: Use the formula:
\[ \text{Profit} = (\text{Selling price} - \text{Variable cost}) \times Q - \text{Fixed cost} \]

Step 2: Substitute values:
\[ 5000 = (50-30) \times Q - 20000 \] \[ 5000 = 20 Q - 20000 \] \[ 20 Q = 25000 \] \[ Q = \frac{25000}{20} = 1250 \]