A fabrication company engaged in production of a motor part has a production capacity of 700, 000 pieces per year. But, it is just operating at 62% of its full capacity due to unavailability to finance the importation of their materials. The company has an annual income of P 430, 000.00, annual fixed cost are P 190, 000.00 and variable costs are P 0.348 per unit. How many productions of parts must be produced for break-even point?

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Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.