Neco Model Questions Vol1 2018 Economics Question 45

Practice objective / multiple choice question 45 from the 2018 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2018 Economics Objective / Multiple Choice Medium Difficulty
Question 45 NECO_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • objective

A firm sells a product for ₦150 per unit. Fixed costs are ₦45,000. The variable cost per unit is ₦80 for the first 500 units and ₦70 for each unit beyond 500. Determine the break‑even output and, if the firm actually sells 800 units, calculate the profit and the margin of safety as a percentage (to one decimal place).

Answer Options

A. Break‑even output = 580 units, Profit = ₦11,500, Margin of safety = 19.5\%
B. Break‑even output = 600 units, Profit = ₦13,000, Margin of safety = 20.0\%
Correct Answer C. Break‑even output = 625 units, Profit = ₦14,000, Margin of safety = 21.9\%
D. Break‑even output = 650 units, Profit = ₦15,500, Margin of safety = 23.0\%
Correct Answer
C
Correct Option:
Break‑even output = 625 units, Profit = ₦14,000, Margin of safety = 21.9\%

About This Question

This is Neco Model Questions Vol1 2018 Economics Question 45. It is one of the objective questions from the 2018 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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