5.6 SDN - Production Planning

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Aria runs a small bakery and wants to know the formula for breakeven (BE) point. What is the formula for breakeven (BE) point?

• FC × (P - VC)

• FC / (P - VC)

• (P - VC) / FC

• FC / P

Benjamin runs a lemonade stand. What is the correct formula for calculating the contribution margin per unit of lemonade sold?

• P - AVC

• P - FC

• P + VC

• P × FC

Michael works at a factory that manufactures 15,000 items and discovers that 300 are faulty. What is the defect rate according to quality control standards?

• 1%

• 2%

• 3%

• 4%

Maya runs a small bakery and wants to measure her productivity. What does the term 'output per hour worked' refer to in the context of her bakery's productivity?

• The total output produced in a specific time frame

• The total output per employee

• The total output relative to the number of machines

• The total input used in production

Rohan's factory produces 800 items and discovers that 40 of them are faulty. What is the percentage of faulty items in this production batch?

• 4%

• 5%

• 6%

• 7%

Daniel runs a small bakery and wants to calculate his labor productivity. He knows that his total output for the day is 200 loaves of bread, and he has employed 5 workers. The calculation for labor productivity can be defined as

• Total output / Total labor input

• Total output × Total labor input

• Total output - Total labor input

• Total output / Total capital input

Emma operates a small coffee shop and wants to determine her efficiency rate. She served 150 cups of coffee using 30 liters of milk. The formula for efficiency rate is best described as

• (Total output / Total input) × 100

• (Total input / Total output) × 100

• Total output + Total input

• Total output × Total input

What does a high degree of operating leverage imply for a business's financial structure?

• The business has significant fixed costs and can greatly increase profits with higher sales

• The business has minimal fixed costs and consistent profit margins

• The business is not generating enough revenue to cover its costs

• The business is facing a high rate of product returns