A company's fixed operating costs are Rs. 800,000, its variable costs are Rs. 30 per unit, and the product's sales price is Rs. 70. What is the company's operating break even point?

The break-even point (BEP) in units is calculated using the formula:

$$\text{BEP (units)}=\frac{\text{Fixed Costs}}{\text{Sales Price per Unit}-\text{Variable Cost per Unit}}$$

Given:

• Fixed operating costs = Rs. 800,000
• Variable cost per unit = Rs. 30
• Sales price per unit = Rs. 70

Substitute the values:

$$\text{BEP (units)}=\frac{800,000}{70-30}=\frac{800,000}{40}=20,000\text{ units}$$

Thus, the company's operating break-even point is 20,000 units. At this level, total revenue equals total costs, and the company neither makes a profit nor incurs a loss.