Break Even Analysis Knowledge Check
40 minutes ago
farrelljc
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11 QuestionsShow answers
  • Question 1
    30 seconds
    Q. What does break even point show?
    answer choices
    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"?

    answer choices

    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? 
    answer choices
    £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?

    answer choices

    220,360

    150,300

    183,633

    225,120

  • Question 5
    30 seconds
    Q. Some business costs are classified as fixed costs because they
    answer choices
    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
    answer choices
    are sometimes short of working capital
    don't have access to industry figures
    may have inexperienced employees
    don't have past sales records
  • Question 7
    30 seconds
    Q. A business that does not reach break-even will
    answer choices
    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
    answer choices
    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
    answer choices
    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?
    answer choices
    220,360
    150,300
    183,633
    225,120
  • Question 11
    30 seconds
    Q. Define variable costs.
    answer choices
    costs only related to making the product
    overhead costs
    combined costs
    costs that include marketing
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