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- 1. Multiple ChoiceWhat does break even point show?where a business is neither making a profit or losshow many items to makehow much profit they're makingwhere a business has more fixed costs than variable
- 2. Multiple Choice
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
- 3. Multiple ChoiceWhat is the margin of safety?the margin between projected units and break even point unitsthe margin between profit and lossthe margin between units and salesthe margin between each break even point
- 4. Multiple Choice
What is the formula for contribution?
cost price - selling price
fixed costs - variable costs
selling price - variable cost
selling price - cost price
- 5. Multiple ChoiceWhat is one limitation to calculating break even?helps projected salesbased on estimatesbased on multiple productsconsiders stock wastage
- 6. Multiple ChoiceTo draw the BE graph you must plot Total Costs and ........Total ProductionTotal RevenueTotal Fixed CostsTotal Units
- 7. Multiple Choice
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£200Cannot be calculated - 8. Multiple Choice
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
- 9. Multiple Choice
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
- 10. Multiple ChoiceSome business costs are classified as fixed costs because theymust be paid within a set timedon't change when sales go up or downare unpredictable and must be estimatedcost all businesses the same amount
- 11. Multiple ChoiceIf a business's sales double, its variable costs will also likelyremain the samedecreaseincreasedouble
- 12. Multiple ChoiceMost businesses receive the bulk of their income fromdividendssales revenuereturn on investmentcapital
- 13. Multiple ChoiceOne of the main purposes for calculating break-even is to help the business todetermine stock valueprepare an income statementforecast salesset selling prices
- 14. Multiple ChoiceBusinesses calculate break-even in units so they knowhow much profit they will earn after they break evenwhich products they should purchase for resalewhich costs are variable and which are fixedhow many products they must sell to break even
- 15. Multiple Choice
Which one of the following would be included in the calculation of total costs?
Selling price
Rent of premises
Revenue
Refund to a customer
- 16. Multiple Choice
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
- 17. Multiple Choice
Gemima's dolls houses are very popular, she is considering setting her selling price to £55. If she does this what would happen to her break-even point?
Would increase
Would decrease
Would stay the same
- 18. Multiple Choice
Bart is planning on opening an ice cream parlour. After carrying out some research a friend has presented him with a break-even chart but he is unsure of what it means.
He has asked you to show him where the break-even point is.
1
2
3
4
- 19. Multiple Choice
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
- 20. Multiple Choice
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
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