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A company's break even point is 6,000 units per annum. The selling price is Rs 90 per unit and the variable cost is Rs 40 per unit. What are the company's annual fixed costs?
- ARs 120
- BRs 2,40,000
- CRs 3,00,000
- DRs 5,40,000
Correct answer: C
Discussion 1
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CCommunity
Rs 3,00,000
Fixed Costs = Break-Even Point (Units) × (Revenue per Unit – Variable Cost per Unit)
= 6000 × ( 90 - 40) = Rs. 300000.
Fixed Costs = Break-Even Point (Units) × (Revenue per Unit – Variable Cost per Unit)
= 6000 × ( 90 - 40) = Rs. 300000.