Answer :
To find the Break Even Point (BEP) in units, we need to use the formula for break even in units, which is given by:
[tex]\text{BEP (units)} = \frac{\text{Fixed Costs}}{\text{Contribution per Unit}}[/tex]
Given data:
- Selling Price per Unit (SP) = ₹40
- Fixed Costs = ₹60,000
- Contribution to Sales Ratio = 40%
Step-by-step Explanation:
1. Calculate Contribution per Unit:
The contribution per unit is the amount derived after subtracting variable costs from the selling price, specifically:
[tex]\text{Contribution per Unit} = \text{Contribution to Sales Ratio} \times \text{Selling Price per Unit}[/tex]
[tex]\text{Contribution per Unit} = 0.40 \times 40 = ₹16[/tex]
2. Calculate the Break Even Point in units:
Using the BEP formula:
[tex]\text{BEP (units)} = \frac{60,000}{16} = 3750[/tex]
Therefore, the Break Even Point in units is 3750.
Thus, the correct answer is C. 3750.
