National 5 Bus Mgt Break-even

What is the name given to the method of calculating whether a product will make a profit or loss in the future?

• Break-even Analysis
• Preparing an Income statement
• Preparing a Cash Budget
• Working out a Source of Finance

Break-even analysis can help a business take good financial  ___________

• Journeys
• Decisions
• Sales
• Banking

What does break-even analysis NOT help answer?

• The profitability of a product or service at a level of sales
• The number of units needed to be sold cover all costs 
• The changes in profit for different levels of sales of a product
• The overall company profit or loss made in a year

What three lines are normally shown on a break-even chart?

• Fixed costs, variable costs and sales
• Fixed costs, total costs and sales
• Variable costs, total costs and sales
• Total costs and sales

Where on the y-axis of a break-even chart does the total costs line always start?

• At the amount of fixed costs
• At the amount of variable costs
• At zero
• At the amount of sales

What is the name given to fixed costs + variable costs?

• Overall costs
• Total costs
• Company costs
• Break-even costs

If total costs are greater than sales, what will the company make?

• Neither a profit or loss
• A loss
• A profit
• A surplus

What is the definition of a fixed cost?

• A cost which does vary with output or sales
• A cost which does not vary with output or sales
• A costs which must be paid by each company
• A cost which does not need to be paid by each company

Select the example of a variable cost from list below

• Rent
• Insurance
• Raw materials
• Bank loan repayments

What is the definition of a variable cost?

• A cost which does vary with output or sales
• A cost which does not vary with output or sales
• A costs which must be paid by each company
• A cost which does not need to be paid by each company