Free Printable Break even point

1.

What is the break-even point?

a)

The point at which a business makes a profit

b)

The point at which a business makes a loss

c)

The point at which revenue and total costs are the same, meaning the business makes neither a profit nor a loss

2.

One of the main purposes for calculating break-even is to help the business to

a)

determine stock value

b)

prepare an income statement

c)

forecast sales

d)

set selling prices

3.

A business that does not reach break-even will

a)

go bankrupt

b)

have profit and loss

c)

lose money

d)

need to relocate

4.

Most businesses receive the bulk of their income from

a)

dividends

b)

sales revenue

c)

return on investment

d)

capital

5.

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

6.

If a business's sales double, its variable costs will also likely

a)

remain the same

b)

decrease

c)

increase

d)

double

7.

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

8.

When a business has made enough money to pay its costs and begin to make a profit, it has reached its

a)

break-even point

b)

variable-cost margin

c)

fixed cost

d)

selling price

9.

What factors do you need to consider when calculating the Break Even Point? (You may choose as many as you see)

a)

the fixed costs

b)

sales revenue per unit

c)

variable costs per unit

d)

output activity

10.

Daisy is an artist. It costs her $150 per week to operate her art studio. In this case, what is the $150?

a)

the break-even point

b)

the fixed cost

c)

the variable cost

d)

the sales revenue

11.

Sophie creates handbags from her home studio (costing $600 per month to operate). Each bag requires materials that cost $40. Each bag takes two hours to make (at $15 per hour). The baskets are sold for $125 each.

What is the variable cost per unit?

a)

$40

b)

$30

c)

$125

d)

$600

e)

$70

12.

Sophie creates handbags from her home studio (costing $600 per month to operate). Each bag requires materials that cost $40. Each bag takes two hours to make (at $15 per hour). The baskets are sold for $125 each.

What is the sales revenue per unit?

a)

$40

b)

$30

c)

$125

d)

$600

e)

$70

13.

Sophie creates handbags from her home studio (costing $600 per month to operate). Each bag requires materials that cost $40. Each bag takes two hours to make (at $15 per hour). The baskets are sold for $125 each.

What is the fixed cost?

a)

$40

b)

$30

c)

$125

d)

$600

e)

$70

14.

Sophie creates handbags from her home studio (costing $600 per month to operate). Each bag requires materials that cost $40. Each bag takes two hours to make (at $15 per hour). The baskets are sold for $125 each.

How many baskets does Sophie need to sell per month to break even?

(a)

15.

Which is the correct formula to calculate the Break Even Point?

a)

fixed costs / (sales revenue per unit - variable costs per unit)

b)

fixed cost per unit / (sales revenue - variable costs)

c)

sales revenue / (fixed costs per unit + variable costs per unit)

d)

fixed costs + sales revenue - variable costs per unit

e)

fixed costs / (sales revenue per unit + variable costs per unit)

16.

Which is the correct formula to calculate the Break Even Point?

a)

fixed costs / (sales revenue per unit - variable costs per unit)

b)

fixed cost per unit / (sales revenue - variable costs)

c)

sales revenue / (fixed costs per unit + variable costs per unit)

d)

fixed costs + sales revenue - variable costs per unit

e)

fixed costs / (sales revenue per unit + variable costs per unit)

17.

If the Break Even Point for a cake decorator is 14, what does that mean?

a)

they need to make 14 cakes each month

b)

they need to sell 14 cakes per month

c)

they need to sell at least 15 cakes per month

d)

the cakes need to be at least $14 each

e)

the variable costs for each cake add to $14

18.

When a business has made enough money to pay its costs and begin to make a profit, it has reached its

a)

break even point

b)

variable-cost margin

c)

fixed cost

d)

selling price

19.

Fixed costs are called this 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

20.

If Ben's Etsy store sales double, his variable costs will likely

a)

remain the same

b)

decrease

c)

increase

d)

double

21.

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

22.

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

23.

Define variable costs.

a)

costs only related to making the product

b)

overhead costs

c)

combined costs

d)

costs that include marketing

24.

Define variable costs.

a)

costs only related to making the product

b)

overhead costs

c)

combined costs

d)

costs that include marketing

25.

Daisy is an artist. It costs her $150 per week to operate her art studio. In this case, what is the $150?

a)

the break-even point

b)

the fixed cost

c)

the variable cost

d)

the sales revenue

26.

Tony pays Php120 daily for rent in his BBQ stand. Each stick costs him Php4 and sells it for Php8. How many sticks of BBQ should he sell everyday to reach break even point?

a)

30

b)

120

c)

4

d)

240

27.

Rent is an example of a fixed cost.

a)

TRUE

b)

FALSE

28.

Variable costs are affected by the number of items sold.

a)

TRUE

b)

FALSE

29.

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

30.

What is represented by the purple region in the break even diagram shown here?

a)

The break even point

b)

Profit

c)

Loss

31.

What is represented by the orange region in the break even diagram shown here?

a)

The break even point

b)

Profit

c)

Loss

32.

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

33.

Define mark up

a)

profit

b)

the cost price

c)

the selling price

d)

the added cost to cost price

34.

My total sales are 50,000 for 1,000 units. What must my selling price be for one unit?

a)

50

b)

10

c)

500

d)

Cannot be calculated

35.

What is the correct calculation for break-even?

a)

Variable costs ÷ (selling price − fixed costs)

b)

Fixed costs ÷ (selling price − variable costs)

c)

Selling price ÷ (fixed costs − variable costs)

d)

Revenue ÷ (fixed costs − variable costs)

36.

If fixed costs are £12,000, the selling price is £5 and the variable cost is £2 per unit, what is the break-even point?

a)

5000 units

b)

4000 units

c)

4200 units

d)

4500 units

37.

Which of these statements best describes profit?

a)

Profit is any revenue left after all costs have been deducted

b)

Profit describes when a business has spent more than its revenue

c)

Profit is where a revenue and costs are the same

d)

Profit is what is below the break-even point

38.

What is the correct calculation for revenue?

a)

Revenue = Selling price × Quantity sold

b)

Revenue = Selling price × Fixed costs

c)

Revenue = Quantity sold × Costs of sales

d)

Revenue = Variable costs x fixed costs

39.

What is a fixed cost?

a)

A cost that changes depending on the level of output

b)

A cost that doesn't change, no matter what the level of output

c)

A cost that sometimes changes, and sometimes stay the same

d)

A Cost that varies according to inflation

40.

If a business has fixed costs of £5,600 and variable costs of £1,225, what are the total costs?

a)

£6,845

b)

£5,765

c)

£6,825

d)

£4,375

41.

If you sell 20 cupcakes at 0.50p what will your sales revenue be?

a)

£10

b)

£1000

c)

£100

d)

£1

42.

In a Break-even graph what is shown above the break-even point is referred as

(a)

43.

Rent, salaries, monthly installments to the bank are considered as

a)

total costs

b)

variable costs

c)

fixed costs

d)

losses

44.

These are examples of variable costs

a)

rent, tuition, loan payments

b)

raw materials, electricity, fuel

45.

How can a business maximize profit?

a)

Elevating prices for their product or service

b)

Finding suppliers of raw material that offer more competitive prices

c)

Reducing the salaries of its staff by half

d)

Offering discounts to clients

46.

What is the formula for Margin of safety?

a)

Actual sales - Sales at Break Even Point

b)

Actual Sales + Sales at Breakeven Point

c)

Actual Sales x Sales at Breakeven point

d)

Actual Sales / Sales at Breakeven Point

47.

What is a business doing at the break-even point?

a)

Making a profit

b)

Making a loss

c)

Making neither a profit or a loss

48.

On a break even chart, what line does the total revenue line meet at the break even point?

a)

Fixed Cost Line

b)

Variable Cost Line

c)

Total Cost Line

49.

When does the break-even point change?

a)

When costs go up

b)

When costs go down

c)

When cost change

50.

When does the break-even point fall?

a)

When costs go up

b)

When costs go down

c)

When costs change

51.

If the average variable costs £10, average selling price is £25 and fixed costs are £60,000, then what is the break-even output?

a)

4,000

b)

5,000

c)

6,000

52.

Select the most appropriate points relating to Fixed Cost

a)

Partially fixed, partially variable

b)

Variable per unit

c)

Fixed in total

d)

Example : Material cost

e)

Example: Rent

53.

Select the most appropriate features of variable cost

a)

Example: Telephone charges

b)

Variable in total

c)

Variable per unit

d)

Fixed per unit

e)

Example : Material Cost

54.

Salary to manager is

a)

Variable Cost

b)

Fixed Cost

c)

Semi-variable cost

d)

None of the above

55.

In order to make a profit a business must make ? money from sales than what is paid out in expenses

a)

less

b)

more

c)

the same

d)

pass

56.

The break even point is when

a)

Profit=Sales

b)

Sales=Fixed Costs

c)

Total Costs=Total Revenue

d)

Total Costs<Total Revenue

57.

In a BEP Chart, quantity (units) usually appears on the

a)

X axis

b)

Y axis

58.

In a BEP Chart, sales (£) usually appears on the

a)

X axis

b)

Y axis

59.

Costs are also known as expenses, which is

a)

Money coming in to the business

b)

Money going out of the business

60.

A fixed cost

a)

Changes depending on levels of production

b)

Stays the same no matter how many units are made

61.

A variable cost

a)

Changes depending on levels of production

b)

Stays the same no matter how many units are made

62.

Examples of Fixed Costs include

a)

Rent

b)

Raw materials

c)

Insurance

d)

Electricity

63.

Examples of Variable Costs include

a)

Rates

b)

Loan repayments

c)

Raw materials

d)

Employees on a piece rate

64.

Total revenue is calculated by

a)

Selling price / units sold

b)

Selling price x units sold

c)

Units sold / selling price

d)

Fixed costs + variable costs

65.

Unit price- Unit cost=___________

a)

Contribution

b)

Gross profit per unit

c)

Loss

d)

Net profit prer unit

66.

What is a business doing at the break-even point?

a)

Making a profit

b)

Making a loss

c)

Making neither a profit or a loss

67.

If the average variable costs £10, average selling price is £25 and fixed costs are £60,000, then what is the break-even output?

a)

4,000

b)

5,000

c)

6,000

Break even point

Total questions: 67

Worksheet time: 2hrs 12mins

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