REVISION QUESTIONS: FEM 2204

What is the formula to calculate the break-even sales volume?

• Fixed Costs ÷ Selling Price per Unit

• (Selling Price - Variable Cost) ÷ Fixed Costs

• Fixed Costs ÷ (Selling Price - Variable Cost)

• Selling Price × Units Sold

Given: Selling Price = RM28, Variable Cost = RM9, Fixed Costs = RM180,000. What is the break-even sales volume?

• 5,000 units

• 7,000 units

• 9,474 units

• 10,588 units

If RM40,000 of fixed costs are reclassified as variable costs, making the new variable cost RM13 per unit, what is the new break-even volume?

• 12,000 units

• 15,000 units

• 17,000 units

• 18,000 units

What is the correct formula for profit margin

• Net Profit ÷ Sales Revenue

• Fixed Cost ÷ Sales Revenue

• Net Profit ÷ Initial Investment

• Sales Revenue ÷ Variable Cost

How is ROI (Return on Investment) calculated?

• Net Profit ÷ Units Sold

• Net Profit ÷ Initial Investment × 100%

• Sales Revenue ÷ Fixed Costs

• Initial Investment ÷ Net Profit

What is the main purpose of a business plan?

• To avoid competition
  

• To entertain clients
  

• To guide business operations and attract investors
  

• To spend more money

Social entrepreneurship aims to:

• Maximize government profit

• Solve social issues through entrepreneurial activities

• Work in government offices

• Avoid public scrutiny

Which of the following is a public sector entrepreneurship example?

• NGO running a free school

• Government agency launching an e-payment platform

• Farmer’s cooperative

• Crowdfunded health clinic

Which of the following is NOT a source of business idea?

• Customer feedback

• Observing trends

• Imitating competitors

• Ignoring the market

Based on the following two investment strategies:

🔹 Scenario A – Spend RM60,000 on influencer marketing → sales increase to 14,000 units, price drops to RM26, variable cost remains RM9.
🔹 Scenario B – Spend RM100,000 on automation → fixed cost increases by RM40,000, variable cost drops to RM7, sales volume remains 10,500 units at RM28.

Which of the following statements is MOST accurate?

• Scenario A has higher risk due to marketing cost and price reduction, but offers more sales volume.

• Scenario B offers lower profitability because automation increases fixed costs.

• Scenario A achieves better ROI despite lower net profit.

• Both scenarios generate the same profit but with different investments.

Answer explanation

• Scenario A increases sales volume but reduces price and incurs additional marketing cost – hence, higher risk but potential for growth.

• Scenario B increases fixed cost but reduces variable cost, and maintains price – potentially higher profit margin.

• ROI may still favor Scenario B due to lower overall investment per profit earned.