For a given product, the sales of a company @₹200 per unit is ₹20,00,000. Variable cost is ₹12,00,000 and fixed cost is ₹6,00,000. The capacity of the factory is 15,000 units. Capacity utilisation at break-even point lev
CS Executive · Cost and Management Accounting · PYQS · December 2014
For a given product, the sales of a company @₹200 per unit is ₹20,00,000. Variable cost is ₹12,00,000 and fixed cost is ₹6,00,000. The capacity of the factory is 15,000 units. Capacity utilisation at break-even point level is —
Answer & Explanation:
Correct Answer: Option (B)
Correct answer: (B) 50%. Contribution per unit = (20,00,000−12,00,000)/10,000 = 80; break-even output = 6,00,000/80 = 7,500 units, or 50% of 15,000 capacity.
Topics: Marginal Costing
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