Correct Answer - Option 1 : 2500 units
Concept:
\({\rm{Break\;even\;point}} = \frac{{Total\;fixed\;cost\;\left( {TFC} \right)}}{{Price\;per\;unit\;\left( P \right) - Variable\;cost\;\left( {V.C.} \right)}}\)
Calculation:
Given:
Total fixed cost (TFC) = 100000, SP = 80, VC = 40.
\(Break~even ~point = {100000\over80-40} =2500\).
Hence, the quantity of break-even is 2500 units.