MATs - Lessons 8 - Plenary

Calculate the break-even volume, in units per quarter, for product AN02?

• 545

• 1,500

• 12,000

• 857

• 15,000

Answer explanation

*£22-14

£12,000/£8*

What is the Profit-Volume ratio (contribution sales ratio) as a %

• 40%

• 24%

• 16%

• 60%

Answer explanation

25,000-15,000=10,000*

25000/10,000*=0.40

0.40 x 100=40%

What is the break-even point in sales volume?

• 25,000

• 15,000

• 10,000

• 6,000

Answer explanation

£25,000 - £15,000

Calculate the margin of safety for the last month, in terms of the percentage of the month’s sales value.

• 40%

• 24%

• 16%

• 60%

Answer explanation

60% ((£25,000 - £10,000) / £25,000)

Jane runs an ice cream stall during the summer. She sells tubs of ice cream in various flavours that she buys for 90p and sells for £2.00 each. She rents the stall for £150 per week which is her only fixed cost.

What is the break-even point in tubs of ice-cream per week (round up to the nearest whole tub).

• 73

• 136

• 52

• 137

Answer explanation

(150 / (2.00 – 0.9))

Jane runs an ice cream stall during the summer. She sells tubs of ice cream in various flavours that she buys for 90p and sells for £2.00 each. She rents the stall for £150 per week which is her only fixed cost.

Jane wants to pay herself £350 per week. Calculate how many tubs she will need to sell to reach her earnings target?

• 500

• 455

• 319

• 458

Answer explanation

((150 + 350) / 1.10)

Jane runs an ice cream stall during the summer. She sells tubs of ice cream in various flavours that she buys for 90p and sells for £2.00 each. She rents the stall for £150 per week which is her only fixed cost.

Calculate the Contribution / Sales (CS) ratio (also known as the Profit-Volume ratio) as a percentage.

• 55%

• 45%

• 75%

• 68%

Answer explanation

(1.10/2.00) x 100%

Jane runs an ice cream stall during the summer. She sells tubs of ice cream in various flavours that she buys for 90p and sells for £2.00 each. She rents the stall for £150 per week which is her only fixed cost.

Janes target is £350 per week.

The Profit-Volume ratio is 55%. Use it his to calculate the sales value in £ for Jane to reach her target earnings (round up to the nearest £).

• £319

• £637

• £273

• £910

• £455

Answer explanation

(500/0.55).