Break-Even Quiz

What are fixed costs?

• Costs that change in direct proportion to output

• Costs that do not change with output

• All of the costs of the business summed up.

The cost of producing a single unit of output is known as?

• Variable Cost

• Total Cost

• Average Cost

The break-even is?

• The level of output where revenue equals total cost

• The level of output where revenue equals average cost

• The level of output where profit equals variable cost

• The level of output where fixed cost equals revenue

What is not a purpose of calculating break-even?

• To calculate how many units the business needs to produce before it starts to make a profit

• To calculate the effect on profit for increasing or decreasing the price of a product

• To calculate the effect on the business costs of an increase or decrease in demand

What does the break-even point represent?

• Profit

• Loss

• Total revenue equals total cost

• Revenue equals zero

Which of the following is an example of variable cost?

• Rent

• Salary

• Insurance

• Raw materials

What is the formula for calculating the break-even point in units?

• Fixed Costs / (Selling Price per unit - Variable Costs per unit)

• Total Revenue / Variable Costs per unit

• Total Costs / Selling Price per unit

• Fixed Costs / Variable Costs per unit

Suppose a business has fixed costs of $4,500, variable costs per unit of $10, and the selling price per unit is $25. What is the break-even point in units?

• 100 units

• 200 units

• 300 units

• 500 units

A business has fixed costs of $8,000, variable costs per unit of $20, and a selling price per unit of $40. Calculate the break-even point in units.

• 200 units

• 400 units

• 600 units

• 800 units

A business has fixed costs of $10,000, variable costs per unit of $5, and the selling price per unit is $15. What is the break-even point in units?

• 250 units

• 500 units

• 750 units

• 1000 units