This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Break Even Analysis > Break Even Point – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Break Even Point Quiz 10 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of these statements is true about break even analysis? A) Helps to identify fixed and variable costs. B) Helps to set the selling price. C) Helps to calculate future revenue. D) None of these. Show Answer Correct Answer: D) None of these. 2. One of the limitations of break-even charts is: A) They cannot be used to calculate profit. B) They cannot show the safety margin. C) They are based on the assumption that all output is sold. D) They are based on the assumption that the business makes a profit at all levels of output. Show Answer Correct Answer: C) They are based on the assumption that all output is sold. 3. Selling price is £ 10, Variable Cost is £ 5, Fixed Cost is £ 500. What is the break even point? A) £ 100. B) £ 10. C) 1000 items'. D) 100 items. Show Answer Correct Answer: D) 100 items. 4. 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? A) £ 2, 500. B) 2, 500. C) £ 1, 500. D) £ 3, 750. Show Answer Correct Answer: B) 2, 500. 5. 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. Show Answer Correct Answer: B) Don't change when sales go up or down. 6. A computer has been discounted by 32%. The original cost was $ 900. What is the new price? A) $ 1188. B) $ 288. C) $ 612. D) $ 600. Show Answer Correct Answer: C) $ 612. 7. Most businesses receive the bulk of their income from A) Dividends. B) Sales revenue. C) Return on investment. D) Capital. Show Answer Correct Answer: B) Sales revenue. 8. State one advantage of using a break even chart (1 mark) A) Is based on predicted costs and revenues. B) Can calculate the level of profit or loss at different levels. C) Ignores changes in variable costs. D) Does not take account of external factors. Show Answer Correct Answer: B) Can calculate the level of profit or loss at different levels. 9. What enables managers to calculate the level of output at which revenue from sales and total costs are equal? A) Break-even analysis. B) Unit contribution. C) Break-even output. D) Margin of safety. Show Answer Correct Answer: A) Break-even analysis. 10. 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? A) 300. B) (£ 300). C) £ 300. D) £ 600. Show Answer Correct Answer: C) £ 300. 11. What is the formula for calculating profit using the break-even concept? A) Total contribution-Selling price. B) Fixed costs-Total contribution. C) Fixed costs / Total contribution. D) Total contribution-Fixed costs. Show Answer Correct Answer: D) Total contribution-Fixed costs. 12. Which of the following would enable you to calculate the total costs? A) Average costs + fixed cost. B) Fixed costs-total variable costs. C) Variable costs + average costs. D) Fixed costs + total variable costs. Show Answer Correct Answer: D) Fixed costs + total variable costs. 13. Burn Rate is: A) When a Business spend money a lot. B) The rate at which a company spends cash to cover overhead costs without generating a positive cash flow. C) When a company burn all the money. D) None of above. Show Answer Correct Answer: B) The rate at which a company spends cash to cover overhead costs without generating a positive cash flow. 14. Sales price x quantity is the formula for which of the following? A) Profit. B) Total costs. C) Revenue. D) Total variable costs. Show Answer Correct Answer: C) Revenue. 15. What is a business doing when it sells output beyond the break-even point? A) Making a loss. B) Making a profit. C) Making neither a profit or loss. D) None of above. Show Answer Correct Answer: B) Making a profit. 16. What is the definition of a variable cost? A) A cost which does vary with output or sales. B) A cost which does not vary with output or sales. C) A costs which must be paid by each company. D) A cost which does not need to be paid by each company. Show Answer Correct Answer: A) A cost which does vary with output or sales. 17. 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. Show Answer Correct Answer: A) Break-even point. 18. 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? A) £ 300. B) £ 500. C) £ 200. D) Cannot be calculated. Show Answer Correct Answer: A) £ 300. 19. What could be a cause of cashflow problems? A) Sales may not be as high as expected. B) Customers pay too little for products. C) Sales may be high than expected. D) Competitors increase promotion. Show Answer Correct Answer: A) Sales may not be as high as expected. 20. 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. Show Answer Correct Answer: D) Don't have past sales records. ← PreviousNext →Related QuizzesCost Accounting QuizzesAccounting QuizzesBreak Even Point Quiz 1Break Even Point Quiz 2Break Even Point Quiz 3Break Even Point Quiz 4Break Even Point Quiz 5Break Even Point Quiz 6Break Even Point Quiz 7Break Even Point Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books