Computation of Break even point
Break even point = Total Fixed Cost / (Selling price p.u. - Variable cost p.u.)
= 6000* / (40-10)
= 6000 / 30
= 200 inspections per month
* Fixed cost is the cost of lease per month of the machine
Computation of number of inspections required to earn profit of Rs. 3000
No of inspections required = (Total fixed cost + Required profit) / (Selling price p.u. - Variable cost p.u.)
= (6000 + 3000) / (40-10)
= 9000 / 30
= 300 inspections per month
3. Mr. Taylor owns a service station in Palapye. Taylor is considering leasing a machine that...
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