This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Break Even Analysis > Break Even Point – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Break Even Point Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Brian and Amy invest $ 2700 to start a hair cutting business. Each hair cut costs them $ 1.50 (supplies). They charge their customer $ 15 for each cut.How many hair cuts until they breakeven? A) 200 hair cuts. B) 22 hair cuts. C) 2700 hair cuts. D) 15. Show Answer Correct Answer: A) 200 hair cuts. 2. Average costs of buying supplies falls as business expands A) Average cost. B) Margin of safety. C) Purchasing economy of scale. D) Contribution per unit. Show Answer Correct Answer: C) Purchasing economy of scale. 3. Frederick is revising his formulae for a test on break-even. He has mixed up his revision notes. What is the formula for Profit? A) Total revenue-total cost. B) Fixed cost + variable cost. C) Actual output-break-even point. D) Total revenue = total cost. Show Answer Correct Answer: A) Total revenue-total cost. 4. 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 A) 150. B) 22. C) 19. D) 20. Show Answer Correct Answer: A) 150. 5. Frederick is revising his formulae for a test on break-even. He has mixed up his revision notes. What is the formulas for Total Costs A) Total revenue-total cost. B) Fixed cost + variable cost. C) Actual output-break-even point. D) Total revenue = total cost. Show Answer Correct Answer: B) Fixed cost + variable cost. 6. Which of the following best defines the term variable cost? A cost which: A) Stays the same regardless of output. B) Changes according to output. C) Changes with time. D) Are only paid when the business first sets up. Show Answer Correct Answer: B) Changes according to output. 7. Why is equal to price per unit minus variable cost per unit? A) Break-even output. B) Unit contribution. C) Break-even analysis. D) Margin of safety. Show Answer Correct Answer: B) Unit contribution. 8. At break even, which two lines cross A) Fixed and Total Cost. B) Fixed and Total Revenue. C) Units and Cost. D) Total Revenue and Total Cost. Show Answer Correct Answer: D) Total Revenue and Total Cost. 9. Raw materials cost for a steel manufacturer are an example of its ..... costs A) Fixed. B) Average. C) Total. D) Variable. Show Answer Correct Answer: D) Variable. 10. If the unit contribution is increased then: A) The break-even point is higher. B) The break-even point is lower. C) The break-even point is unchanged. D) None of above. Show Answer Correct Answer: B) The break-even point is lower. 11. The total costs of a business are equal to: A) The profit made. B) Variable costs plus added value. C) Quantity of units produced multiplied by average cost of producing each unit. D) Quantity of units sold multiplied by the selling price. Show Answer Correct Answer: C) Quantity of units produced multiplied by average cost of producing each unit. 12. What is "break-even quantity" ? A) The output at which revenue is greater than costs. B) The output at which revenue is equal to costs. C) The output at which revenue is less than costs. D) The output at which costs is greater than revenue. Show Answer Correct Answer: B) The output at which revenue is equal to costs. 13. Fill in the blank. The name given to the difference between BEP and actual sales above this point is ..... ..... ..... A) Margin of safety. B) Sales margin. C) Safety zone. D) Sales surplus. Show Answer Correct Answer: A) Margin of safety. 14. What happens to fixed costs if there is a decrease in contribution per unit? A) Fixed costs decreases. B) The margin of safety falls. C) Fixed costs increases. D) No-change fixed costs are not affected. Show Answer Correct Answer: D) No-change fixed costs are not affected. 15. The net cash flow is (300) and the opening balance is 800. What is the closing balance? A) (500). B) (1200). C) 500. D) 1200. Show Answer Correct Answer: C) 500. 16. How is break even point measures? A) Dollars. B) Loss. C) Profit. D) Items. Show Answer Correct Answer: D) Items. 17. Which one of the following would be included in the calculation of total costs? A) Selling price. B) Rent of premises. C) Revenue. D) Refund to a customer. Show Answer Correct Answer: B) Rent of premises. 18. What external source of finance could help long term cash flow? A) An overdraft. B) Sale of business assets. C) A loan. D) None of these. Show Answer Correct Answer: C) A loan. 19. When break even is low a business needs to sell more to make a profit A) True. B) False. C) No effect. D) None of above. Show Answer Correct Answer: B) False. 20. Which one of the following statements is true about the break-even point? A) Total costs are less than total revenue. B) Variable costs are equal to total revenue. C) Total costs are equal to total revenue. D) Total costs are greater than total revenue. Show Answer Correct Answer: C) Total costs are equal to total revenue. ← 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books