This quiz works best with JavaScript enabled. Home > Finance > Accounting > Cost Accounting > Break Even Analysis > Break Even Point – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Break Even Point Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Breakeven point may be calculated in A) Days. B) Dollars. C) Time. D) All the above. Show Answer Correct Answer: D) All the above. 2. Why is the level of output or production at which total costs exactly equal revenue from sales? A) Break-even analysis. B) Margin of safety. C) Break-even output. D) Unit contribution. Show Answer Correct Answer: C) Break-even output. 3. Which is defined as the point when the total cost of a product is equal to the total income? A) Mark-up. B) Break-even. C) Profit. D) Loss. Show Answer Correct Answer: B) Break-even. 4. When selling prices go up, sales might fall A) True. B) False. C) No effect. D) None of above. Show Answer Correct Answer: A) True. 5. The break-even formula is A) Fixed costs / (selling price-variable costs). B) Fixed costs / (variable costs-total costs). C) Contribution / by fixed costs. D) Fixed costs-revenue. Show Answer Correct Answer: A) Fixed costs / (selling price-variable costs). 6. What is the formula for Total Costs? A) Variable costs-Fixed costs. B) Selling price + Fixed costs. C) Variable costs + Fixed costs. D) Variable costs X Fixed costs. Show Answer Correct Answer: C) Variable costs + Fixed costs. 7. Variable costs are those that change ..... A) Relative to competitive offerings. B) Relative to property taxes. C) Relative to market considerations. D) Relative to output or sales. Show Answer Correct Answer: D) Relative to output or sales. 8. Which of the following is not a direct cost of production for a car manufacturer? A) Raw materials. B) Wages of production workers. C) Depreciation. D) Factory rental cost. Show Answer Correct Answer: D) Factory rental cost. 9. Businesses calculate break-even in units so they know A) How much profit they will earn after they break even. B) Which products they should purchase for resale. C) Which costs are variable and which are fixed. D) How many products they must sell to break even. Show Answer Correct Answer: D) How many products they must sell to break even. 10. Use these figures to calculate profit:fixed costs $ 14, 750, SP $ 9 per unit:VC per unit $ 4; Units made and sold 3, 500. A) $ 16, 750. B) $ 2, 750. C) -$ 2, 750. D) -$ 750. Show Answer Correct Answer: B) $ 2, 750. 11. The closing balance for Feb is £ 300. Net cash flow for March is £ 400. What's the March Opening Balance A) £ 700. B) £ 100. C) £ 300. D) None of these. Show Answer Correct Answer: C) £ 300. 12. If variable costs are $ 3 per unit, then the total variable costs of producing 3 500 units willbe: A) $ 35 000. B) $ 10 500. C) $ 3 500. D) $ 1 050. Show Answer Correct Answer: B) $ 10 500. 13. What is meant by contribution per unit? A) Selling price-Variable costs per unit. B) Variable costs-Selling price per unit. C) Selling price per unit-Fixed costs. D) Fixed costs-selling price per unit. Show Answer Correct Answer: A) Selling price-Variable costs per unit. 14. On a break even chart, which line starts at fixed costs? A) Total Costs. B) Variable Costs. C) Total Revenue. D) Fixed Costs. Show Answer Correct Answer: A) Total Costs. 15. Costs that are applied on a per item basis are typically A) Fixed. B) Variable. C) Monthly. D) None of these. Show Answer Correct Answer: B) Variable. 16. What are the total variable costs if output is zero? A) Zero. B) Equal to contribution per unit. C) Equal to fixed costs. D) Equal to selling price per unit. Show Answer Correct Answer: A) Zero. 17. Gemima's dolls houses are very popular, she is considering setting her selling price to £ 55. If she does this what would happen to her break-even point? A) Would increase. B) Would decrease. C) Would stay the same. D) None of above. Show Answer Correct Answer: B) Would decrease. 18. What is the 'formula' for calculating Net Cash Flow? A) Total payments-Total receipts. B) Total receipts + Total Payments. C) Opening balance + Net cash flow. D) Total receipts-Total payments. Show Answer Correct Answer: D) Total receipts-Total payments. 19. What happens to break-even output if contribution per unit increases and fixed costs stay the same? A) It stays the same. B) It is cancelled out. C) It increases. D) It falls. Show Answer Correct Answer: D) It falls. 20. 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) 1000. B) 12000. C) 500. D) 2100. Show Answer Correct Answer: C) 500. 21. 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. 22. Which is the following is a direct cost to a computer retailer A) Rental cost. B) Depreciation of delivery vehicle. C) After-sales care. D) Marketing cost. Show Answer Correct Answer: C) After-sales care. 23. The break-even level of output is that number of units at which: A) Variable costs equal revenue. B) Profit is at its highest level. C) Variable costs equal fixed costs. D) Total costs equal total revenue. Show Answer Correct Answer: D) Total costs equal total revenue. 24. The average cost is calculated by using which of the following? A) Total variable costs divided by output. B) Total costs divided by output. C) Revenue divided by output. D) Fixed costs divided by output. Show Answer Correct Answer: B) Total costs divided by output. 25. One of the main purposes for calculating break-even is to help the business to A) Prepare an income statement. B) Set selling prices. C) Forecast sales. D) Determine stock value. Show Answer Correct Answer: B) Set selling prices. 26. Salaries are usually a A) Fixed cost. B) Intransitive cost. C) Variable cost. D) Negligible cost. Show Answer Correct Answer: A) Fixed cost. 27. 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. 28. What does the break even point show? A) How much profit they are making. B) Where a buiness has more fixed costs than variable costs. C) How many items to make. D) Where a business is neither making a profit nor a loss. Show Answer Correct Answer: D) Where a business is neither making a profit nor a loss. 29. What is an example of a fixed cost? A) Wages. B) Rent. C) Overheads ( water, electricity). D) Raw Materials. Show Answer Correct Answer: B) Rent. 30. The formula to calculate Total Cost is: A) TOTAL COST = REVENUE-VARIABLE COSTS. B) TOTAL COST = VARIABLE COSTS X FIXED COSTS. C) TOTAL COST = VARIABLE COSTS + FIXED COSTS. D) TOTAL COST = REVENUE-FIXED COSTS. Show Answer Correct Answer: C) TOTAL COST = VARIABLE COSTS + FIXED COSTS. ← PreviousNext →Related QuizzesCost Accounting QuizzesAccounting QuizzesBreak Even Point Quiz 1Break Even Point Quiz 2Break Even Point Quiz 4Break Even Point Quiz 5Break Even Point Quiz 6Break Even Point Quiz 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books