Engineering Board Exam Reviewer · Break-Even Analysis · medium
A product sells for P120 with a variable cost of P70 per unit. Fixed costs are P500,000. How many units must be sold to earn a profit equal to 20% of sales?
- 10,000 units
- 19,230.77 units
- 6,756.76 units
- 25,000 units
Answer
B. 19,230.77 units
Solution
Profit =0.20(120x): (120-70)x-500,000=24x 26x=500,000 x=19,230.77 units.
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