Question

A firm $ABC$ starts producing pens and finds that the production cost of each pen is Rs $10$, and the fixed expenditures of production is Rs. $4500$. If each pen is sold for Rs. $25$, find break-even point.

• A. $x=200$
• B. $x=100$
• C. $x=400$
• D. $x=300$

Answer 1

The correct option is D $x=300$

Manufacturing cost $=10$

Number of pens $=10$

Total manufacturing cost $=10x+4500$

Selling cost $=25x$

Break even value $\Rightarrow$ manufacturing cost $=$ Selling cost

$\Rightarrow 10x+4500=25x$

$x=300$