Business A Level - Formula Test 2.2

What is the correct formula for Break Even?

• Variable costs

  / contribution per unit

• Fixed costs

  / contribution per unit

• Variable costs

  / selling price

• Fixed costs

  / selling price

What is the correct formula for contribution per unit?

• Variable cost per unit - selling price

• Selling price - fixed cost per unit

• Selling price - variable cost per unit

• Fixed costs per unit - Variable cost per unit

What is the formula for Margin of Safety?

• Breakeven - Actual output

• Actual - budgeted

• Budgeted - Actual

• Actual output - Breakeven output

What is the formula for Variance?

• Actual - budget

• Budget - Actual

• Revenue - costs

• Actual - variable cost

Which of these is NOT a variable cost?

• Cost of raw materials

• Wages of shift workers

• Rent

• Commission

Which of these is NOT a fixed cost?

• Business rates

• Energy used in the production process

• Insurance

• Advertising campaign

Which of these describes historical budgeting?

• Budgeting approach that involves developing a new budget from scratch every time

• Using the previous year's budget and updating it with minor adjustments for inflation and other foreseeable changes

Which of these describes zero based budgeting?

• Budgeting approach that involves developing a new budget from scratch every time

• Using the previous year's budget and updating it with minor adjustments for inflation and other foreseeable changes

If Actual expenditure > Budget expenditure this means variance is

• Favourable

• Adverse

If Actual profit < Budget profit means variance is...

• Favourable

• Adverse