This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Break Even Analysis > Break Even Point – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Break Even Point Quiz 5 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The florist should break-even at 800 bunches of flowers per month. If they can confidently sell 1300 bunches of flowers, what is their margin of safety? A) 500. B) 2100. C) 1000. D) 12000. Show Answer Correct Answer: A) 500. 2. All the following are likely causes of diseconomies of scale except A) Weak coordination between departments. B) Obtaining a large loan at a preferential interest rate. C) Low motivation levels of workers. D) Long chains of communications. Show Answer Correct Answer: B) Obtaining a large loan at a preferential interest rate. 3. Which is the following is a direct cost to a computer retailer A) Marketing cost. B) After-sales care. C) Rental cost. D) Depreciation of delivery vehicle. Show Answer Correct Answer: B) After-sales care. 4. The break-even level of output is that number of units at which: A) Profit is at its highest level. B) Variable costs equal revenue. C) Total costs equal total revenue. D) Variable costs equal fixed costs. Show Answer Correct Answer: C) Total costs equal total revenue. 5. The average cost is calculated by using which of the following? A) Fixed costs divided by output. B) Total costs divided by output. C) Revenue divided by output. D) Total variable costs divided by output. Show Answer Correct Answer: B) Total costs divided by output. 6. 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. Show Answer Correct Answer: D) Set selling prices. 7. Salaries are usually a A) Fixed cost. B) Variable cost. C) Negligible cost. D) Intransitive cost. Show Answer Correct Answer: A) Fixed cost. 8. A ..... or ..... firms buys goods that is sells A) Trading, Merchandising. B) Buyer, Seller. C) Exchange, Retailing. D) Whole Selling, Retailing. Show Answer Correct Answer: A) Trading, Merchandising. 9. What does the break even point show? A) Where a business is neither making a profit nor a loss. B) How much profit they are making. C) How many items to make. D) Where a buiness has more fixed costs than variable costs. Show Answer Correct Answer: A) Where a business is neither making a profit nor a loss. 10. What is an example of a fixed cost? A) Rent. B) Overheads ( water, electricity). C) Raw Materials. D) Wages. Show Answer Correct Answer: A) Rent. 11. The formula to calculate Total Cost is: A) TOTAL COST = VARIABLE COSTS X FIXED COSTS. B) TOTAL COST = VARIABLE COSTS + FIXED COSTS. C) TOTAL COST = REVENUE-VARIABLE COSTS. D) TOTAL COST = REVENUE-FIXED COSTS. Show Answer Correct Answer: B) TOTAL COST = VARIABLE COSTS + FIXED COSTS. 12. If you produce a number of units that is below the break-even point you will ..... A) Make a loss. B) Make a profit. C) Make no money at all. D) None of above. Show Answer Correct Answer: A) Make a loss. 13. What three lines are normally shown on a break-even chart? A) Fixed costs, variable costs and sales. B) Fixed costs, total costs and total sales revenue. C) Variable costs, total costs and sales. D) Total costs and sales. Show Answer Correct Answer: B) Fixed costs, total costs and total sales revenue. 14. Which of the following is a limitation of using break even analysis? A) The business may change its selling price. B) The product may become more fashionable. C) Takes no account of the credit crunch. D) A new market entrant will affect the level of demand. Show Answer Correct Answer: A) The business may change its selling price. 15. What is the margin of safety if the break-even output (sales) is 250 and the actual sales is 600? A) 600. B) 450. C) 350. D) 250. Show Answer Correct Answer: C) 350. 16. Fixed costs A) Do not change. B) Are usually equal to variable costs. C) Are always negative. D) Do not change relative to output. Show Answer Correct Answer: D) Do not change relative to output. 17. Materials used as a component of a product are usually A) Fixed. B) Variable. C) Not listed in a P & L Statement. D) Unimortant. Show Answer Correct Answer: B) Variable. 18. Parc Oasis Ltd. has fixed cost of $ 15, 000 per month, with unit variable cost of $ 200 and a selling price of $ 500 per unit. What is Parc Oasis Ltd. break-even level of output per month? A) 21. B) 30. C) 50. D) 75. Show Answer Correct Answer: C) 50. 19. What is the break-even output if the variable cost per booklet is £ 2, the fixed costs are £ 30, 000 and selling price is £ 5? A) 5, 000. B) 10, 000. C) 15, 000. D) 20, 000. Show Answer Correct Answer: B) 10, 000. 20. On a break even chart, which line is horizontol? A) Total Revenue. B) Fixed Costs. C) Total Costs. D) Variable Costs. Show Answer Correct Answer: B) Fixed Costs. ← 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 6Break Even Point Quiz 7Break Even Point Quiz 8Break Even Point Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books