Break-Even Analysis Quiz

What is the first step in a break-even analysis?

• Calculating the break-even point of a product or service.

• Analyzing the profit margins.

• Determining the total sales.

• Evaluating the market demand.

What do managers do after calculating the break-even point?

• Conduct a break-even analysis to strategize about prices and costs.

• Increase the production volume.

• Reduce the workforce.

• Expand the product line.

Why is it important for companies to know how many units or sales they need to become profitable?

• To ensure they cover costs and start making a profit.

• To increase their market share.

• To reduce their tax liabilities.

• To improve employee satisfaction.

What is the formula to calculate the break-even point?

• Net Sales + Fixed Costs + Variable Costs

• Net Sales - Fixed Costs - Variable Costs

• Net Sales x Fixed Costs x Variable Costs

• Net Sales / Fixed Costs / Variable Costs

What is the break-even analysis used to evaluate?

• Market trends

• Employee performance

• Production costs and sales

• Customer satisfaction

Which of the following is a variable considered in break-even analysis?

• Employee salaries

• Fixed Production Costs

• Variable Production Costs

• Office rent

Which cost remains constant regardless of the number of units produced?

• Variable Production Costs

• Unit Sales Price

• Fixed Production Costs

• Expected Unit Sales

What does the break-even analysis help firms determine?

• The optimal number of employees

• The point at which profit begins

• The best marketing strategy

• The ideal product design

What is the effect of increasing the unit sales price on the break-even point?

• Decreases the break-even point

• Increases the break-even point

• No effect on the break-even point

• Eliminates the break-even point

Which of the following would cause the break-even point to decrease?

• Increase in fixed costs

• Decrease in unit sales price

• Increase in expected unit sales

• Decrease in variable costs