Introduction to Break-Even Analysis and Calculation

What happens when a business's costs are lower than its revenue?

• The business has no change in financial status.

• The business breaks even.

• The business incurs a loss.

• The business makes a profit.

At what point does a business reach its break-even level of output?

• When total revenue equals total costs.

• When total costs are greater than total revenue.

• When total costs are zero.

• When total revenue is greater than total costs.

What is the break-even level of output?

• Price multiplied by variable cost per unit.

• Total revenue minus total costs.

• Fixed costs plus variable costs.

• Fixed costs divided by price minus variable cost per unit.

What is the contribution per unit if a T-shirt sells for £10 and costs £6 to produce?

• £6

• £4

• £10

• £16

How is profit calculated using the contribution and fixed costs?

• Profit is the fixed costs divided by total contribution.

• Profit is the total contribution plus fixed costs.

• Profit is the fixed costs minus total contribution.

• Profit is the total contribution minus fixed costs.

If a shop sells 150 units, what is the total contribution if the contribution per unit is £40?

• £2000

• £6000

• £1500

• £4000

What is the profit if the total contribution is £6000 and fixed costs are £4000?

• £2000

• £1000

• £4000

• £3000