WorksheetsBreak-even Analysis
Total questions: 16
Worksheet time: 7mins
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
Total contribution = ?
Total sales less total variable costs
Total sales less fixed costs
Variable costs less fixed costs
Total selling price less fixed costs.
If the selling price per unit is $ 100 and contribution per unit is $ 75, what are the total variable costs if 150 units are sold?
$ 11,250
$ 15,000
Not possible to calculate
$ 3,750
What happens to break-even output if contribution per unit increases and fixed costs stay the same?
It stays the same
It is cancelled out
It increases
It falls
Use these figures to calculate profit: fixed costs $ 14,750, SP $ 9 per unit: VC per unit $ 4; Units made and sold 3,500.
$ 16,750
- $ 750
$ 2,750
- $ 2,750
What happens to fixed costs if there is a decrease in contribution per unit?
Fixed costs decreases
The margin of safety falls
Fixed costs increases
No-change fixed costs are not affected.
What is the break-even output formula?
Fixed costs / Contribution per unit
Fixed costs / Selling price per unit
Contribution per unit/ / Fixed costs
Fixed costs / Variable costs per unit
What is the break-even output if fixed costs are £30,000, selling price per unit is £20 and variable costs per unit are £8?
£2,500
2,500
£1,500
£3,750
What is the break-even output if the amount charged to customers is £60, the cost of making each item is £25 and fixed costs are £700,000?
£20,000
£2,000
20,000
2,000
How would you determine the break-even point on a graph?
Where the lines for total revenue and total costs cross
Where the lines for total revenue and fixed costs cross
Where the lines for total costs and fixed costs cross
Where the lines for fixed costs and variable costs cres..
What is the profit (or loss) if 10 units were sold at a selling price of £85, the variable costs per unit was £25 and fixed costs were £300?
300
(£300)
£300
£600
What is meant by the term "margin of safety"?
The amount by which the actual output of a business is greater than its break-even output.
The amount of safety involved in producing enough sales revenue to cover total costs
The amount by which the break-even quantity of a business is greater than its actual output.
The amount of sales needed to cover all the costs of the business.
What is the margin of safety if the break-even output (sales) is 250 and the actual sales is 600?
600
450
350
250
What is the total variable cost of producing 10,000 booklets if the selling price is £5, the variable cost per booklet is £2 and fixed costs are £30,000?
£30,000
£20,000
£15,000
£10,000
What is the break-even output if the variable cost per booklet is £2, the fixed costs are £30,000 and selling price is £5?
5,000
10,000
15,000
20,000
