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WorksheetsBreak even Analysis - S3
Total questions: 15
Worksheet time: 15mins
What are the total variable costs if output is zero?
Equal to contribution per unit.
Zero
Equal to fixed costs.
Equal to selling price per unit.
What is a business doing at the break even point?
Making a loss
Producing the startup output
Making neither a profit nor a loss
Making a profit.
What is the correct definition of the break even point?
The point at which sales revenue = fixed costs
The difference between selling price and the total variable costs
The revenue gained from selling every unit of output made
The total sales needed to cover the total costs of the business
Which of the following is a limitation of using break even analysis?
The business may change its selling price
The product may become more fashionable
Takes no account of the credit crunch
A new market entrant will affect the level of demand
Total contribution = ?
Total sales less total variable costs
Total sales less fixed costs
Variable costs less fixed costs
Total selling price less fixed costs.
When does the break-even point fall?
When fixed costs rise
When depreciation increases
When the selling price decreases
When fixed cost fall.
What assumption does this statement say "Break even is 54 units"?
if we sell 55 we aren't making a profit
if we sell 54 we begin to make a profit
if we sell 55 we begin to make a profit
if we sell 54 we are not yet at break even point
Fixed costs: = £30,000
Variable cost: = £200 per photo shoot
Forecast output (Sales): = 140 photo shoots
Selling price: = £1000 per photo shoot
What is the Total Contribution?
£112 000
£112 500
£375
£800
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
Gemima sells dolls houses at £50 each. Each dolls house costs her £32 to make. Her fixed costs are £2700. How many dolls houses must Gemima make in order to break-even?
Break-even = fixed cost
Selling price per unit - variable cost per unit
150
22
19
20
Bart should break-even at 600 ice creams per month. He believes that he can sell 850 ice creams per month. What is his margin of safety?
250
1450
150
50
Frederick is revising his formulae for a test on break-even. He has mixed up his revision notes. What is the formulas for Profit
Total revenue - total cost
Fixed cost + variable cost
Actual output - break-even point
Total revenue = total cost
