This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Break Even Analysis > Break Even Point – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Break Even Point Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Costs classified as fixed ..... A) Change with the number of units sold. B) Stay the same regardless of number of units sold. C) Vary from month to month. D) Are the same for all similar businesses. Show Answer Correct Answer: B) Stay the same regardless of number of units sold. 2. What does the x-axis show you on a break-even chart? A) Level of sales in units. B) Level of sales in £. C) Sales and Costs in units. D) None of above. Show Answer Correct Answer: A) Level of sales in units. 3. Which one of the following costs is most likely to be variable for a fast food restaurant? A) The salary of the manager. B) The rent of the restaurant. C) The cost of the food supplies. D) The machinery used to cook the food. Show Answer Correct Answer: C) The cost of the food supplies. 4. Break-even analysis can help a business take good financial ..... A) Journeys. B) Decisions. C) Sales. D) Banking. Show Answer Correct Answer: B) Decisions. 5. If the selling price per unit is $ 100 and contribution per unit is $ 75, what are the total variable costs if 150 units are sold? A) $ 11, 250. B) $ 15, 000. C) Not possible to calculate. D) $ 3, 750. Show Answer Correct Answer: D) $ 3, 750. 6. What is the amount at which the product is to be sold? A) Cost Price. B) Selling Price. C) Net Sale. D) Profit. Show Answer Correct Answer: B) Selling Price. 7. What is meant if we say "break-even is 54 units" ? A) If we sell 55 units we aren't making a profit. B) If we sell 54 units we begin to make a profit. C) If we sell 55 units we begin to make a profit. D) If we sell 54 units we are not yet at break-even point. Show Answer Correct Answer: C) If we sell 55 units we begin to make a profit. 8. A strategy to reduce cash outflows would be? A) Change the pricing strategy of your products. B) Sell some fixed assets. C) Find cheaper suppliers. D) Limit trade credit for customers. Show Answer Correct Answer: C) Find cheaper suppliers. 9. A business sells 12, 000 units per year. Fixed costs per year are £ 50, 000 and variable costs are £ 2.50 per unit. The business's total costs are: A) £ 30, 000. B) £ 54, 800. C) £ 62, 000. D) £ 80, 000. Show Answer Correct Answer: D) £ 80, 000. 10. Price per unit minus variable cost per unit A) Margin of safety. B) Contribution per unit. C) Purchasing economy of scale. D) Diseconomies of scale. Show Answer Correct Answer: B) Contribution per unit. 11. A product sells for $ 7. Material and other variable costs are $ 3 per unit. Fixed costs are $ 60 000. The break-even level of output is: A) 15 000 units. B) 60 000 units. C) 20 000 units. D) We cannot tell from the information given. Show Answer Correct Answer: A) 15 000 units. 12. At zero output on a break even diagram, the total cost line will always start: A) At zero on both axes. B) Where the variable cost line starts. C) Where the fixed cost line starts. D) Where the total revenue line starts. Show Answer Correct Answer: C) Where the fixed cost line starts. 13. If average variable cost is £ 10, and average selling price is £ 25, then what is contribution? A) £ 35. B) £ 15. C) £ -15. D) £ 40. Show Answer Correct Answer: B) £ 15. 14. If there is an increase in costs what will happen to the break-even point and profits? A) Break-even point rises, profits rise. B) Break-even point rises, profits fall. C) Break-even point falls, profits rise. D) Break-even point falls, profits fall. Show Answer Correct Answer: B) Break-even point rises, profits fall. 15. Another word for financial cost is: A) Price. B) Retail. C) Incur. D) Expense. Show Answer Correct Answer: D) Expense. 16. Which one of the following is the correct formula to calculate total costs? A) Total costs minus total variable costs. B) Total fixed costs plus total variable costs. C) Total costs plus total variable costs. D) Total fixed costs minus total variable costs. Show Answer Correct Answer: B) Total fixed costs plus total variable costs. 17. The margin of safety is- A) Total revenue minus total costs. B) Fixed plus variable costs. C) Actual output plus break even point. D) Actual output minus break even point. Show Answer Correct Answer: D) Actual output minus break even point. 18. To draw the BE graph you must plot Total Costs and ..... A) Total Production. B) Total Revenue. C) Total Fixed Costs. D) Total Units. Show Answer Correct Answer: B) Total Revenue. 19. *rent*internet*insurance*salaries*loan repaymentsThese are examples of what costs? A) Average. B) Fixed. C) Total. D) Variable. Show Answer Correct Answer: B) Fixed. 20. Select the example of a variable cost from list below A) Rent. B) Insurance. C) Raw materials. D) Bank loan repayments. Show Answer Correct Answer: C) Raw materials. ← 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 7Break Even Point Quiz 8Break Even Point Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books