Quizz 2 FAD

How do we achieve the break-even point?

• • With revenue that covers both variable and fixed costs.

• • When the contribution margin equals the variable costs.

• • When the contribution margin equals the analytical result.

• • No answer

When a company sees its revenue increase, what should normally happen to its net profit in order to maintain the same net margin rate?

• • It must increase

• • It must decrease

• • It must remain constant

• • No answer

When the break-even point is exceeded:

• • The company incurs losses

• • The company does not make profits

• • The company makes profits

• • No answer

What is meant by contribution margin?

• • It is the product of revenue multiplied by fixed costs

• • It is the break-even point in quantity

• • It is the break-even point multiplied by variable costs

• • It is the result of the formula: revenue - variable costs

To decrease its break-even point, a company should:

• • Decrease the selling price and/or decrease the quantity sold

• • Increase fixed costs and increase the unit variable cost

• • Decrease fixed costs and/or increase the selling price and/or decrease the unit variable cost

• • No answer

The owner of a pizzeria restaurant displays the following elements:

Fixed costs (FC) = 60,000 D

Variable costs (VC) = 27,500 D

Achieved revenue: 110,000 D

The contribution margin rate on variable costs is:

• • 75%

• • 25%

• • 45%

• • No answer

If a company has Fixed Costs = 60,000 D; a contribution margin rate on variable costs = 75%; VC = 30,000 D,

Its break-even point in value is:

• • 80,000 D

• • 240,000 D

• • 130,000 D

• • No answer

Knowing that the average price of a product is 12.5 D, and the break-even point in value is 80,000 D,

The break-even point in quantity is:

• • 19,200 units

• • 6,400 units

• • 10,500 units

• • 8,800 units

The break-even point indicates when:

• • The company becomes profitable

• • Fixed costs are covered

• • Variable costs are covered

• • No answer

Advertising expenses are considered:

• • Variable costs

• • Fixed costs

• • Exceptional costs

• • No answer