A company’s break even point is 6,000 units per annum. The selling price is Rs 90 per unit and the variable cost is Rs 40 per unit. What are the company’s annual fixed costs?

The correct answer is: C. Rs 3,00,000

The break even point is the point at which a company’s revenue equals its costs. At this point, the company is not making any profit or loss. The break even point can be calculated using the following formula:

Break even point = Fixed costs / (Selling price per unit – Variable cost per unit)

In this case, the break even point is 6,000 units per annum. The selling price is Rs 90 per unit and the variable cost is Rs 40 per unit. Substituting these values into the formula, we get:

Break even point = Fixed costs / (90 – 40) = 6,000 units per annum

Solving for the fixed costs, we get:

Fixed costs = (6,000 units per annum x 90 per unit) – 40 per unit = Rs 3,00,000

Therefore, the company’s annual fixed costs are Rs 3,00,000.

Option A is incorrect because it is the selling price of one unit. Option B is incorrect because it is the variable cost of one unit. Option D is incorrect because it is the total cost of producing 6,000 units.