Break Even Analysis Knowledge Check
40 minutes ago
farrelljc
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• Question 1
30 seconds
Q. What does break even point show?
where a business is neither making a profit or loss
how many items to make
how much profit they're making
where a business has more fixed costs than variable
• Question 2
30 seconds
Q.

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

• Question 3
30 seconds
Q. My total costs are £50,000 when selling 100 items. My fixed costs are £20,000. What must be the variable cost of one item?
£300
£500
£200
Cannot be calculated
• Question 4
120 seconds
Q.

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?

220,360

150,300

183,633

225,120

• Question 5
30 seconds
Q. Some business costs are classified as fixed costs because they
must be paid within a set time
don't change when sales go up or down
are unpredictable and must be estimated
cost all businesses the same amount
• Question 6
30 seconds
Q. It may be difficult for a new business to predict its variable costs because new businesses
are sometimes short of working capital
may have inexperienced employees
don't have past sales records
• Question 7
30 seconds
Q. A business that does not reach break-even will
go bankrupt
have profit and loss
lose money
need to relocate
• Question 8
30 seconds
Q. Businesses calculate break-even in dollars so they know the
amount of the business's after tax-earnings
total dollar value of the stock on hand
total dollar sales needed to reach break-even
amount the business can spend on new purchases
• Question 9
30 seconds
Q. Businesses calculate break-even in units so they know
how much profit they will earn after they break even
which products they should purchase for resale
which costs are variable and which are fixed
how many products they must sell to break even
• Question 10
120 seconds
Q. 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?
220,360
150,300
183,633
225,120
• Question 11
30 seconds
Q. Define variable costs.