Homework Answers
Breakeven is the where the total fixed cost is covered along with the variable cost.
Fixed cost = 200,000
Contribution margin = Selling price - Variable cost
= 600 - 400
= $200
Units sold = 400
Total contribution margin
= 200*400
= $80, 000
Government Grant = 100,000
Therefore the amount to be raised from other source for breakeven will be
= 200,000 - 100,000 - 80,000
= $20, 000
So the correct option is 4th.
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