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WorksheetsCosts, Sales, Revenue and Breakeven Analysis
Total questions: 62
Worksheet time: 38mins
The difference between the actual output and the breakeven level is known as the:
Buffer zone
Minimum cost line
Current ratio
Margin of safety
At any level of output below the breakeven point, a business will:
Make a profit
Make a loss
Increase selling price
Incur fixed costs
Which of these formulae defines the point at which breakeven occurs?
None of these
Total Revenue = Total Costs
Total Profit = Total Costs
Total Revenue = Total Price
Breakeven output can be calculated by dividing total fixed costs by:
Variable cost per unit sold
Selling price per unit sold
Contribution per unit sold
Total variable costs
If the margin of safety is 7,500 units and breakeven output is 12,200 units, what is actual output?
4,700 units
19,700 units
$19,700
$4,700
An option for a firm looking to reduce its breakeven point is to:
Reduce its selling price
Undertake an advertising campaign
Give the staff a pay rise
Buy cheaper raw materials
A baker's fixed costs are $10,000, sells cakes at SP of $45 and the VC per cake is $25. What is the breakeven level of production?
500 units
20 units
50 units
5,000 units
Other things remaining the same, an increase in fixed costs will:
Increase the breakeven output
Reduce unit costs
Decrease the breakeven output
Increase contribution
What are Fixed Costs?
the amount of money allocated for a business to use in certain departments
business costs, such as rent, that do not vary because of the amount of goods produced
costs that change depending upon the output
the point in a business when the profits are equal to costs
If average variable cost is £10, and average selling price is £25, then what is contribution?
£35
£15
£-15
£40
If the average variable costs £10, average selling price is £25 and fixed costs are £60,000, then what is the break-even output?
5000
7000
6000
4000
What is a business doing when it sells output beyond the break-even point?
Making a loss
Making a profit
Making neither a profit or loss
It is not possible to tell from the graph
What is the break-even point in units for company where total fixed costs are £275,450
selling price per units £16
variable cost per unit is £14.75
220,360
183,633
150,300
225,120
The break even level of output for a firm is 800 units and it is currently making 950 units. What is its margin of safety?
150 units
250 units
300 units
1750 units
Two of these formulas are correct for working out the break-even point. Which two
Fixed Costs / Contribution Margin per unit
Total Costs - Fixed Costs x variable costs per unit
Fixed Costs / Sales price per unit - variable costs per unit
Contribution Margin per unit / Fixed Costs
What is an example of a fixed cost?
Rent
Packaging
Raw Materials
Wages
Which of the following is a limitation of break-even?
It helps projected sales
It is based on multiple products
It assumes all units produced are sold.
It considers stock wages
If a business's sales double, its variable costs will also likely
remain the same
decrease
double
fall
Simon has worked out the following figures for new Bobble Hats he is going to sell. He estimates that he can produce 20 000 hats a month with a selling price of £3.50. He expects the machinery costs to be £60 000 per annum, staff salaries are £72 000 per annum and raw materials cost £30 000 per month.
What is the margin of safety?
66 000
74 000
200 000
174 000
A business should know its breakeven point before it starts up. True or False
True
False
The price at which goods or services are offered by a business to their customers is called
Selling price
Cost
Variable cost
Currency
Costs that must be paid regardless of how much of a good or service is produced. They do not change in the short term, regardless of output are called
Variable costs
Fixed costs
Total costs
The costs
Fixed Cost + Variable Cost =
Breakeven point
Total costs
Fixed costs
Variable costs
The stage at which sales revenue equals the total cost of producing a good or service and the business is making neither a profit nor a loss is the
Taking a break
Breaking point
Point of sale
Breakeven point
A negative difference between the revenues taken in by a business and the costs of operating a business (when a business spends more than it makes) :(
Profit
Breakeven
Loss
Closed
Costs that change based on the amount of goods and services produced.
Total costs
Fixed costs
Variable costs
Costs
A positive difference between the revenues taken in by a business and the costs of operating a business (when a business makes more than it spends). :D
Loss
Profit
Breakeven
Sales
Rent, administrative costs, advertising, employee salary are examples of ...
Variable costs
Fixed costs
Costs
Prices
Raw materials, packaging, wages/labour costs are examples of
Total costs
Fixed costs
Variable costs
Benefits
The income (amount of money) a business receives for in exchange for a product or service
Costs
Profit
Loss
Sales revenue
This is the term given to how many products/services a business produces.
Output
Cost
Fixed Cost
Variable cost
Advertising is...
output
fixed cost
variable cost
Raw materials are...
fixed cost
variable cost
Insurance is...
fixed cost
variable cost
Salaries are...
fixed cost
variable cost
Loan repayment is...
fixed cost
variable cost
Packaging is...
fixed cost
variable cost
Revenue is...
Sales revenue – total costs
Selling price x number of units sold
Fixed costs + variable costs
cost that is independent of output
What is an operating cost?
Something a business pays before the company starts
Something the company receives
Something the company pays for their day to day running
Something the company cant afford
Which 2 of these are examples of start up costs for a small supermarket?
Stock
Buy a shop
Pay wages
Pay a recruitment agency to recruit staff
Which 2 of these are examples of operating costs for a transport company?
Buy a Lorry
Diesel
Utilities
Buy a printer
How are operating costs broken down?
Fixed & Total
Total & Variable
Total & Indirect
Fixed & Variable
If Sam's Sandwiches use 25p of material for each sandwich, what will be their variable costs for 10 sandwiches
10 x 0.25 = £2.50
2.5 x 10 = £25
25 x 10 = £250
0.25/10 = 2.5p
If fixed costs are £300 and Variable costs for making one sandwich are 50p, how would you work out total costs for 200 sandwiches?
200 x 300 x 0.50 = Total Sales
300 + 0.5 X 200 = Total Sales
200 + 0.5 x 300 = Total Sales
300 x 50 + 200 = Total Sales
What is the formula for Revenue?
Total Sales + Costs = Revenue
Number of Sales x Price per unit = Revenue
Price per unit x Total Costs = Revenue
Number of Sales - Total Costs = Revenue
If Wendy sells 50 hot dogs at £2 each. What is her revenue?
£250
£100
£120
£52
If Saleem makes £250 from selling fresh juice, £80 from selling ice creams, £95 from selling lollies and pays £30 to his assistant, what is his total revenue?
£395
£425
£455
£250
On a break even chart, which line starts at zero?
Total Revenue
Fixed Costs
Total Costs
Variable Costs
On a break even chart, which line is horizontol?
Total Revenue
Fixed Costs
Total Costs
Variable Costs
On a break even chart, where is breakeven?
Total Revenue = Total Costs
Fixed Costs = Total Revenue
Total Costs = Fixed Costs
Variable Costs = Total Revenue
What appears on the x axis on a Break Even Chart?
Revenue
Total Costs
Output/Number of units
Sales Revenue
Using this diagram what line is G?
Total Revenue
Variable Costs
Total Costs
Fixed Costs
Using this diagram what line is F?
Total Revenue
Variable Costs
Total Costs
Fixed Costs
Using this diagram what line is H?
Total Revenue
Variable Costs
Total Costs
Fixed Costs
If you have an increase in costs what effect would that have on the break-even point?
Increase
Decrease
Stay the same
Which is a true effect if there is a decrease in costs?
The margin of safety would increase
The number of sales required to break-even increases
Break-even point is lower so the business makes more profit
Which of the following are benefits of using break-even analysis?
The margin of safety is known
The owner can make adjustments as it is a plan
Prices could change
The owner knows how many goods to sell to make a profit
How well are you doing in this quizz?
The sky is the limit!
I want more!
I am just waiting for my bus!
Life is hard
How is the weather today?
Bad
I hate sunny weather
I am chilling like that
A little bit of sunshine will be fine.
Bring on the Snow
If fixed costs are 100, selling price is 10 and the variable costs are 5. What is break-even?
25
20
10
35
What grade are you expecting in the exam for this unit?
Let my people go
A solid A+
May God Help me.
Something in the mid range.
Do you think you are working hard enough for a good grade in the exam for this Unit?
Yes
No
