Costing

consider two following example - 

1.                                  Alt-1        Alt-2

Variable cost (per unit)    100          200

Fixed cost                     250000    300000

now there is no debate about which option to choose because no matter how many units u produce cost in first option will be lower always. so we will choose fst option.

2.                                  Alt-1          Alt-2

Variable cost (per unit)     100            200

Fixed cost                      250000      150000

now u have to think upon which option u r going to choose because at some point alt-1 is benefic while at other alt-2, but there is some point of production where both option will have same cost so thats what we call indifference point..

its always in terms of output..

if i say in terms of equation , then F.C.+ V.C. in first option = F.C. + V.C. in second option

as u know we are working out at what level of production where there will be no difference in total cost so u can assume it to be x and it will be same in both alternatives..thereby getting formula of indifference point..

hope it will solve ur confusion...