Costs and Break-even Analysis

Raw materials costs for a steel manufacturer are an example of its.........costs.

• fixed

• average

• total

• variable

A bakery has weekly fixed costs of $600. The variable costs during one week of operation were $1800 and the output acieved was 6000 loaves. The average cost of each loaf was......

• $0.10

• $0.30

• $0.40

• $4.00

All of the following are likely causes of diseconomies of scale except.....

• weak coordination between departments

• obtaining a large loan at a preferential interest rate

• low motivation levels of workers

• long chains of communication

A computer manufacturing business is planning to open a new factory. It will have annual fixed cost of $1m. The average variable cost of each computer will be $100 and the business plans to sell them for $350 each. They expected break-even level of output will be........units per year.

• 1000

• 2500

• 4000

• 10000

Tax, Insurance and Interest expense are parts of .....

• average cost

• total cost

• variable cost

• fixed cost

Use of specialist machinery to produce large quantities of products that small businesses cannot afford this is an example of economies of scale.......

• purchasing economies

• financial economies

• technical economies

• managerial economies

Total Fixed Costs (FC) of IDR 100.000.000, Total Variable Costs (VC) per unit of IDR 60.000, The selling price of goods per unit is IDR 80.000

BEP Unit Calculation......

• 5000 units

• 5500 units

• 6000 units

• 6500 units

One of the assumptions of break-even analysis is that the fixed cost remains.....

• dynamics

• constant

• changed

• dependable

To find the total revenue, we can calculate it by .......

• multiplying quantity sold and the price

• multiplying volume of sales and variable cost

• multiplying total cost and the price

• multiplying expected unit sales and the total cost

When a business never reaches the BEP, what will happen to that business?....

• loss and have to gain their profit by making lower selling price

• loss and possibility to stop the business

• surplus and they gain more sales because lower from BEP

• volume up and lowering price per unit