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: Apply the profit formula:
\[\text{Profit} = (\text{Selling price} - \text{Variable cost}) \times Q - \text{Fixed cost}\] Step 2: Plug in the given values:
\[5000 = (50-30) \times Q - 20000\] \[5000 = 20 Q - 20000\] \[20 Q = 25000\] \[Q = \frac{25000}{20} = 1250\]