This was a bit tricky but here is my answer:
To answer these questions, we need to first make some assumptions and perform some calculations. Here is how I would approach this problem:
First, we need to assume that the total cost mentioned in the problem is the sum of the variable cost and the fixed cost. Based on this assumption, we can calculate the fixed cost as follows:
Total cost = 75% of total revenue
Total cost = 75% * 50,000 units * 3 birr/unit
Total cost = 112,500 birr
From this, we can calculate the fixed cost as follows:
Fixed cost = Total cost - Total variable cost
Fixed cost = 112,500 birr - 100,000 birr
Fixed cost = 12,500 birr
Next, we can use this information to develop the total revenue, total cost, and total profit equations in terms of quantity. These equations can be written as follows:
Total revenue = Quantity * Selling price
Total cost = Fixed cost + (Quantity * Variable cost)
Total profit = Total revenue - Total cost
Finally, we can use these equations to determine the breakeven point, which is the quantity at which the total profit is zero. To find the breakeven point, we can set the total profit equation equal to zero and solve for Quantity. This yields the following result:
Total profit = 0
Total revenue - Total cost = 0
Quantity * Selling price - Fixed cost - (Quantity * Variable cost) = 0
Quantity * (Selling price - Variable cost) = Fixed cost
Quantity = Fixed cost / (Selling price - Variable cost)
Quantity = 12,500 birr / (3 birr - 100,000 birr/unit)
Quantity = 0.000125 units
Therefore, the breakeven point is 0.000125 units. This means that ABC Company must sell at least 0.000125 units of its toys in order to break even and avoid making a loss.