Solution: What is the number of motors that must be sold each month to break even?

A company which manufactures electric motors has a production capacity of 200 motors a month. The variable costs are P150.00 per motor. The average selling price of the motors is P275.00.

What is the number of motors that must be sold each month to break even?

Problem Statement: ME Board April 1998

A company which manufactures electric motors has a production capacity of 200 motors a month. The variable costs are P150.00 per motor. The average selling price of the motors is P275.00. Fixed costs of the company amount to P20,000 per month which includes taxes. The number of motors that must be sold each month to break even is closest to:

  • A. 40
  • B. 150
  • C. 80
  • D. 160

Problem Answer:

The number of motors that must be sold each month to break even is 160 motors.

Solution:

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