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Breakeven Analysis

Authored by Trung Nguyen

Professional Development

University

Used 2+ times

Breakeven Analysis
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9 questions

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1.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The contribution required to breakeven is best given by which of the following?

Unit selling price less unit variable cost

Unit contribution × number of units sold

Total fixed costs

Total fixed costs/contribution ratio

2.

MULTIPLE SELECT QUESTION

1 min • 1 pt

Which two of the following show how the breakeven point in units can be calculated?

Total fixed costs/contribution per unit

Contribution required to break even/contribution per unit

Contribution/sales

Fixed costs/costs to sales ratio

3.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

A company makes a single product and incurs fixed costs of £30,000 per month. Variable cost per unit is £5 and each unit sells for £15. Monthly sales demand is 7,000 units. The breakeven point in terms of monthly sales units is

2,000 units

3,000 units

4,000 units

6,000 units

4.

MULTIPLE SELECT QUESTION

1 min • 1 pt

Which two of the following statements about traditional breakeven charts are correct?

The fixed costs are depicted by a straight line parallel to the vertical axis.

The sales revenue line passes through the origin.

The total cost line cuts the vertical axis at the point which is equal to the period fixed costs.

The breakeven point is the point where the sales revenue line crosses the fixed cost line.

5.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

A company manufactures a single product for which cost and selling price data are as follows:
Selling price per unit £12
Variable cost per unit £8
Fixed costs per month £96,000
Budgeted monthly sales (units) 30,000. The margin of safety, expressed as a percentage of budgeted monthly sales, is

20%

25%

73%

125%

6.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

A company has calculated its margin of safety to be 20% of budgeted sales. Budgeted sales are 5,000 units per month and budgeted contribution is £25 per unit. What are the budgeted fixed costs per month?

£25,000

£100,000

£125,000

£150,000

7.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Doer Ltd makes a single product, the Whizzo. This product sells for £15, and makes a contribution of £5 per unit. Total fixed costs per annum are £11,125.

If Doer Ltd wishes to make an annual profit of £11,875 how many Whizzos do they need to sell?

1,533 units

2,225 units

2,375 units

4,600 units

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