This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Break Even Analysis > Break Even Point – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Break Even Point Quiz 7 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Total cost is A) Fixed Cost + Revenue Cost. B) Fixed Cost + unit Variable Cost. C) Fixed Cost. D) Fixed Cost + Variable Costs. Show Answer Correct Answer: D) Fixed Cost + Variable Costs. 2. What is the definition of a fixed 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: B) A cost which does not vary with output or sales. 3. Which is a true effect if there is a decrease in costs? A) The margin of safety would increase. B) The number of sales required to break-even increases. C) Break-even point is lower so the business makes more profit. D) None of above. Show Answer Correct Answer: C) Break-even point is lower so the business makes more profit. 4. Which line is not drawn on the break-even chart A) Fixed Cost Line. B) Total Revenue Line. C) Cost of Sales Line. D) Total Cost Line. Show Answer Correct Answer: C) Cost of Sales Line. 5. Fixed Costs £ 42 525Variable Costs £ 3 per ItemForecast Output (Sales) 11 262Sales Revenue £ 135 144What is the Break Even? A) 4725. B) 12. C) 5000. D) None of these. Show Answer Correct Answer: A) 4725. 6. If there is a price increase what will happen to the break-even point? A) It falls. B) It rises. C) It stays the same. D) None of above. Show Answer Correct Answer: A) It falls. 7. Breakeven assumes: A) Most output is sold. B) All output is sold. C) Price changes constantly. D) None of above. Show Answer Correct Answer: B) All output is sold. 8. What is the margin of safety? A) The margin between projected units and break even point units. B) The margin between profit and loss. C) The margin between units and sales. D) The margin between each break even point. Show Answer Correct Answer: A) The margin between projected units and break even point units. 9. Total costs divide by output A) Average cost. B) Margin of safety. C) Break-even level of output. D) Contribution per unit. Show Answer Correct Answer: A) Average cost. 10. What measures the amount by which a business's current level of output exceeds the break-even output? A) Break-even output. B) Unit contribution. C) Break-even analysis. D) Margin of safety. Show Answer Correct Answer: D) Margin of safety. 11. When does the break-even point fall? A) When fixed costs rise. B) When depreciation increases. C) When the selling price decreases. D) When fixed cost fall. Show Answer Correct Answer: D) When fixed cost fall. 12. If you increase Total Costs by 10% and increase Sales Revenue by 10% what would happen to the original break even point? A) It would stay the same. B) It would increase. C) It would decrease. D) None of above. Show Answer Correct Answer: A) It would stay the same. 13. Define variable costs. A) Costs only related to making the product. B) Overhead costs. C) Combined costs. D) Costs that include marketing. Show Answer Correct Answer: A) Costs only related to making the product. 14. We are going to manufacture Whats-Its. The Whats-It machine costs $ 4000.It also costs $ 5 for materials and labour for each Whats-It. We are planning to sell our Whats-Its for $ 12 each. How many Whats-Its must we sell in order to break-even? A) 571.42. B) 572. C) 570. 63. D) 571. Show Answer Correct Answer: B) 572. 15. A business that does not reach break-even will A) Go bankrupt. B) Have profit and loss. C) Lose money. D) Need to relocate. Show Answer Correct Answer: C) Lose money. 16. Which one is not included in the Break Even formula? A) Variable costs per unit. B) Total fixed costs. C) Selling price per unit. D) Cost price per unit. Show Answer Correct Answer: D) Cost price per unit. 17. Anna runs a photography business. She has the following costsFixed costs = £ 30, 000 A) £ 112 000. B) £ 112 500. C) £ 375. D) £ 800. Show Answer Correct Answer: A) £ 112 000. 18. When costs fall, break even point is lower and profits higher A) False. B) True. C) No effect. D) None of above. Show Answer Correct Answer: B) True. 19. A business can reduce the variable cost by A) Increasing the fixed cost. B) Decreasing the fixed cost. C) Finding a new supplier. D) Changing the location of the business. Show Answer Correct Answer: C) Finding a new supplier. 20. Total cost consist of A) Variable cost + sales cost. B) Variable cost + future cost. C) Variable cost + fixed cost. D) Fixed cost + sales cost. Show Answer Correct Answer: C) Variable cost + fixed cost. ← 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 8Break Even Point Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books