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WorksheetsBreak Even Analysis Knowledge Check
Total questions: 11
Worksheet time: 9mins
Name
Class
Date
1.
What does break even point show?
a)
where a business is neither making a profit or loss
b)
how many items to make
c)
how much profit they're making
d)
where a business has more fixed costs than variable
2.
What assumption does this statement say "Break even is 54 units"?
a)
if we sell 55 we aren't making a profit
b)
if we sell 54 we begin to make a profit
c)
if we sell 55 we begin to make a profit
d)
if we sell 54 we are not yet at break even point
3.
My total costs are £50,000 when selling 100 items. My fixed costs are £20,000. What must be the variable cost of one item?
a)
£300
b)
£500
c)
£200
d)
Cannot be calculated
4.
What is the break-even point in units for a company whose total fixed costs are £275,450; selling price per unit is £16; and variable cost per unit is £14.75?
a)
220,360
b)
150,300
c)
183,633
d)
225,120
5.
Some business costs are classified as fixed costs because they
a)
must be paid within a set time
b)
don't change when sales go up or down
c)
are unpredictable and must be estimated
d)
cost all businesses the same amount
6.
It may be difficult for a new business to predict its variable costs because new businesses
a)
are sometimes short of working capital
b)
don't have access to industry figures
c)
may have inexperienced employees
d)
don't have past sales records
7.
A business that does not reach break-even will
a)
go bankrupt
b)
have profit and loss
c)
lose money
d)
need to relocate
8.
Businesses calculate break-even in dollars so they know the
a)
amount of the business's after tax-earnings
b)
total dollar value of the stock on hand
c)
total dollar sales needed to reach break-even
d)
amount the business can spend on new purchases
9.
Businesses calculate break-even in units so they know
a)
how much profit they will earn after they break even
b)
which products they should purchase for resale
c)
which costs are variable and which are fixed
d)
how many products they must sell to break even
10.
What is the break-even point in units for a company whose total fixed costs are $275,450; selling price per unit is $16; and variable cost per unit is $14.75?
a)
220,360
b)
150,300
c)
183,633
d)
225,120
11.
Define variable costs.
a)
costs only related to making the product
b)
overhead costs
c)
combined costs
d)
costs that include marketing
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