XYZ company provided following information: Sales units Sales revenue Variable cost Fixed cost : : : : 20,000 Rs. 200,000 Rs. 80,000 Rs. 60,000 Required: BEP in units and amount

Break-Even Point (BEP) Calculation

Step 1: Determine Selling Price (SP) per unit

$$\text{SP}=\frac{\text{Sales Revenue}}{\text{Sales Units}}=\frac{200,000}{20,000}=\text{Rs. }10\text{ per unit}$$

Step 2: Determine Variable Cost (VC) per unit

$$\text{VC per unit}=\frac{\text{Total Variable Cost}}{\text{Sales Units}}=\frac{80,000}{20,000}=\text{Rs. }4\text{ per unit}$$

Step 3: Calculate Contribution per unit

$$\text{Contribution per unit}=\text{SP}-\text{VC}=10-4=\text{Rs. }6\text{ per unit}$$

Step 4: Compute Break-Even Point (BEP) in units

$$\text{BEP (units)}=\frac{\text{Fixed Cost}}{\text{Contribution per unit}}=\frac{60,000}{6}=10,000\text{ units}$$

Step 5: Compute BEP in amount

$$\text{BEP (amount)}=\text{BEP (units)}\times \text{SP}=10,000\times 10=\text{Rs. }100,000$$

Final Answer:

• BEP in units = 10,000 units
• BEP in amount = Rs. 100,000