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CA Foundation · Quantitative Aptitude · Equations

A manufacturer in Coimbatore has fixed costs of ₹60,000 per month. The variable cost is ₹40 per unit and each unit is sold for ₹55. How many units must be sold per month to break even?

The break-even quantity is 4,000 units. Contribution per unit is ₹55 minus ₹40, which is ₹15, and dividing fixed costs of ₹60,000 by ₹15 gives 4,000 units, where revenue equals total cost.

  1. A1,500
  2. B4,000Correct
  3. C6,000
  4. D1,090

Explanation

At break-even, revenue equals cost: 55x = 60,000 + 40x. So 15x = 60,000 and x = 4,000. Check: revenue 2,20,000; cost 60,000 + 1,60,000 = 2,20,000. The option 1,500 wrongly divides by the selling price minus nothing else, using 60,000/40.

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