Engineering Board Exam Reviewer · Break-Even Analysis · medium

A company's fixed cost is P80,000. If it sells 2,000 units at P60 each with a variable cost of P35 per unit, find the profit or loss.

  1. -P30,000 (a loss)
  2. P30,000 (a profit)
  3. P10,000 (a profit)
  4. -P10,000 (a loss)

Answer

A. -P30,000 (a loss)

Solution

Revenue =2000(60)=120000. Total cost =80000+2000(35)=150000. Profit =120000-150000=-P30,000 (a loss).

More Break-Even Analysis questions

  1. A company has fixed costs of P200,000 per year and variable cost of P50 per unit. If the selling price is P90 per unit, find the…
  2. Using the data above (FC=P200,000, VC=P50, SP=P90), find the total revenue at the break-even point.
  3. A firm has fixed costs of P150,000, variable cost of P30 per unit, and sells units at P60 each. Find the break-even quantity.
  4. A company wants to earn a profit of P100,000 in addition to covering fixed costs of P250,000. If the unit contribution margin is P25, find…
  5. Define "contribution margin" in break-even analysis.

All Break-Even Analysis questions