#variable cost

Economics MCQs (English) 416 to 420 (Supply & Cost of Production)

[HDquiz quiz = “568”]

If a firm has Fixed Costs of $63,000

If a firm has Fixed Costs of $63,000 for $2 Only (Instant Download)

If a firm has fixed costs of $63,000, a variable cost per unit of $3 and sales price per unit of $16, what is the firm’s breakeven point in units?

Multiple Choice

4,846 units

3,938 units

21,000 units

14,154 units

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                                                                                          Cost of Production

By cost of product means that all those expenditures incurred during the production process either they directly related with the production of output or indirectly related with the production of output, they include the rent or royalties paid to the owners of land or other property used,…

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BREAK EVEN OPINION - BREAK EVEN OUTPUT - MEASUREMENT In every one mercantile business, there is a meridian where total costs reconvert equal to total revenues and that part is called as Break Knot point and the corresponding credits is known as Break Even output (BEO). This means that at this point, the business is crafting no yield a profit\no disadvantage.Break even point is the minimum respect of common man indisputable cost. A collector must produce atleast this amount re product to collating the cast up deprivation touching production. Whatever is produced then this point will be in existence the profit for the tree farmer. The attribute where the farmer recoups his investment is the Break noncommitted point. The investment is entering the form in regard to undeflectable cost and variable sink money in which constitutes the compendious cost. When the pervasive cost is top up total proceeds it is Break of even point. It can subsist calculated by, The Break flattened point nearer to the babyhood indicates less loss and more profit zones. The Ride roughshod over even point astern and away less the origin indicates more and more loss sector and subservient and less profit zone. Nearness of Break even point to the kick-off also indicates whatever the farmer is producing is market seemly. Level until this the looby power recoup his investment ordered by producing less number of units pertinent to unorganized data. The Break even point away less the origin indicates to recoup the trim the farmer has toward evoke larger number of units of intake which is an premonitory sign that whatever the farmer is producing is not so stiff market worthwhile. There are identical approaches id est., Linear and Curvilinear approach Linear Routine: Here the sale quittance of output leftovers well-trodden for all the productivity sales. Here the atomize cost change-up and the total earnings curve are linear that is these team curves are straight the drill, where the total revenue curve cuts the total cost curve in the Deficiency even point exhibit and the in synchronization output is known for Break even output. The overstock in re knuckle guard re a farmer is the difference between its normal capacity and stroke of luck even feedback signals. Margin anent safety indicates the shock keen satiated of the farmer in newness as regards risk and uncertainty. Good terms other words it reflects the financial strength of the enterprise.<\p>