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WorksheetsBreak-even
Total questions: 24
Worksheet time: 22mins
Which of the following is not a direct cost of production for a car manufacturer?
Raw materials
Wages of production workers
Factory rental cost
Depreciation
Which is the following is a direct cost to a computer retailer
Marketing cost
After-sales care
Rental cost
Depreciation of delivery vehicle
Contribution per unit is calculated by ______ price minus the ____ variable cost.
Average, total
Total, average
Selling, Average
Total , Total
Contribution per unit is calculated by using the formula
Price minus average fixed costs
Price minus average variable costs
Total revenue minus total costs
Total revenue equals total costs
Total contribution is difference between
Total revenue and total variable costs
Total revenue and total costs
Price and total costs
Price and variable costs
Which of the following is a strength break-even analysis?
It assumes that all output is sold.
It accounts for variances in actual sales and planned output
It assumes that all output is sold at one price
It accounts for both fixed and variable cost
A premium hotel can raise its revenue in a number of ways, except for:
Reducing fixed cost
Reducing its prices
Reducing labor costs
Raising prices during peak periods
What can be worked out from calculating the price of a product and its variable cost?
Total contribution
Unit contribution
Break-even point
Profit per unit
A firm sales revenue of $5 million from sales volume of 4000 units. Its average cost are $600. Fixed cost are $1 million. What is the total contribution for the firm.
$1.6 million
$2.4 million
$2.6 million
$3.6 million
Which of the following cost will continually decline for taxi driver as the mileage covered increases?
Total variable costs
Total fixed costs
Average variable costs
Average fixed cost
Any output sold _____________ the break-even point will generate a __________ for the business
Near , Loss
Above , Profit
Above , Loss
Below , Profit
If a business raises its price, which of the following is most likely to occur?
Break-even output will fall
Break-even output will rise
Profit will fall
Profit will increase
Which of the following statements applies to the margin of safety?
it can be increased if a firm becomes more liquid
The firm produces at break-even level of output so it is financially safe
The firm operates at a level higher than its break-even
The firm makes neither a profit nor a loss
Parc Oasis Ltd. has fixed cost of $15,000 per month, with unit variable cost of $200 and a selling price of $500 per unit.
What is the total cost of production to Parc Oasis Ltd. if it produces 100 units each month.
$15,000
$15,700
$35,000
$65,000
Parc Oasis Ltd. has fixed cost of $15,000 per month, with unit variable cost of $200 and a selling price of $500 per unit.
What is the average cost of producing 200 units per month?
$275
$500
$40,000
$55,000
Parc Oasis Ltd. has fixed cost of $15,000 per month, with unit variable cost of $200 and a selling price of $500 per unit.
What is Parc Oasis Ltd. break-even level of output per month?
21
30
50
75
Parc Oasis Ltd. has fixed cost of $15,000 per month, with unit variable cost of $200 and a selling price of $500 per unit.
If Parc Oasis Ltd. wanted to earn a profit of $50,000 on the sale of 100 units per month, what selling price should be set by the firm?
$500
$575
$700
$850
The level of output at which total costs equal total revenue
Total Revenue
Total Cost
Break-even point of production
Selling price
The amount be which sales level exceeds the break-even level of output
Total cost
Total profit
break-even
Margin of safety
The amount of revenue needed to cover both fixed and variable costs so that the business breaks even (Break-even quantity x Price)
Break-even revenue
Loss
Total cost
Total variable cost
Price - AVC
Total Cost
Total Revenue
unit contribution
profit
The level of output needed to be produced and sold at a particular price to make the particular amount of profit a firm is seeking.
Margin of Safety
Selling prive
Target profit output
Fixed cost
The concept of break-even analysis can help in the following business decisions, except for
Special order decisions
Make-or-buy decision
Payback period (investment appraisal)
Qualitative decision-making
Which of the following is not a criticism of using break-even analysis?
Cost are unlikely to be linear in reality
Unit cost are unlikely to remain constant all levels of output
Prices are unlikely to be constant across all levels of sales
Multi-product firms cannot use break-even analysis.
