This quiz works best with JavaScript enabled. Home > Finance > Accounting > Cost Accounting > Break Even Analysis > Break Even Point – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Break Even Point Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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. 2. 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. 3. 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. 4. What is the margin of safety if the break-even output (sales) is 250 and the actual sales is 600? A) 250. B) 350. C) 450. D) 600. Show Answer Correct Answer: B) 350. 5. Materials used as a component of a product are usually A) Not listed in a P & L Statement. B) Unimortant. C) Variable. D) Fixed. Show Answer Correct Answer: C) Variable. 6. 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) 50. B) 75. C) 21. D) 30. Show Answer Correct Answer: A) 50. 7. 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) 15, 000. B) 20, 000. C) 10, 000. D) 5, 000. Show Answer Correct Answer: C) 10, 000. 8. On a break even chart, which line is horizontol? A) Total Costs. B) Fixed Costs. C) Variable Costs. D) Total Revenue. Show Answer Correct Answer: B) Fixed Costs. 9. 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. 10. 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. 11. 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 machinery used to cook the food. D) The cost of the food supplies. Show Answer Correct Answer: D) The cost of the food supplies. 12. Break-even analysis can help a business take good financial ..... A) Banking. B) Sales. C) Decisions. D) Journeys. Show Answer Correct Answer: C) Decisions. 13. 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) $ 3, 750. B) $ 11, 250. C) $ 15, 000. D) Not possible to calculate. Show Answer Correct Answer: A) $ 3, 750. 14. What is the amount at which the product is to be sold? A) Cost Price. B) Profit. C) Selling Price. D) Net Sale. Show Answer Correct Answer: C) Selling Price. 15. What is meant if we say "break-even is 54 units" ? A) If we sell 55 units we begin to make a profit. B) If we sell 54 units we are not yet at break-even point. C) If we sell 55 units we aren't making a profit. D) If we sell 54 units we begin to make a profit. Show Answer Correct Answer: A) If we sell 55 units we begin to make a profit. 16. A strategy to reduce cash outflows would be? A) Change the pricing strategy of your products. B) Find cheaper suppliers. C) Limit trade credit for customers. D) Sell some fixed assets. Show Answer Correct Answer: B) Find cheaper suppliers. 17. 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) £ 62, 000. C) £ 54, 800. D) £ 80, 000. Show Answer Correct Answer: D) £ 80, 000. 18. Price per unit minus variable cost per unit A) Diseconomies of scale. B) Purchasing economy of scale. C) Margin of safety. D) Contribution per unit. Show Answer Correct Answer: D) Contribution per unit. 19. 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) 60 000 units. B) 20 000 units. C) 15 000 units. D) We cannot tell from the information given. Show Answer Correct Answer: C) 15 000 units. 20. 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. 21. If average variable cost is £ 10, and average selling price is £ 25, then what is contribution? A) £ -15. B) £ 35. C) £ 40. D) £ 15. Show Answer Correct Answer: D) £ 15. 22. 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. 23. Another word for financial cost is: A) Expense. B) Incur. C) Price. D) Retail. Show Answer Correct Answer: A) Expense. 24. 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 fixed costs minus total variable costs. D) Total costs plus total variable costs. Show Answer Correct Answer: B) Total fixed costs plus total variable costs. 25. The margin of safety is- A) Total revenue minus total costs. B) Actual output plus break even point. C) Actual output minus break even point. D) Fixed plus variable costs. Show Answer Correct Answer: C) Actual output minus break even point. 26. To draw the BE graph you must plot Total Costs and ..... A) Total Production. B) Total Revenue. C) Total Units. D) Total Fixed Costs. Show Answer Correct Answer: B) Total Revenue. 27. *rent*internet*insurance*salaries*loan repaymentsThese are examples of what costs? A) Average. B) Fixed. C) Variable. D) Total. Show Answer Correct Answer: B) Fixed. 28. Select the example of a variable cost from list below A) Insurance. B) Bank loan repayments. C) Rent. D) Raw materials. Show Answer Correct Answer: D) Raw materials. 29. What is the definition of a fixed cost? A) A costs which must be paid by each company. B) A cost which does not need to be paid by each company. C) A cost which does not vary with output or sales. D) A cost which does vary with output or sales. Show Answer Correct Answer: C) A cost which does not vary with output or sales. 30. 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. ← PreviousNext →Related QuizzesCost Accounting QuizzesAccounting QuizzesBreak Even Point Quiz 1Break Even Point Quiz 2Break Even Point Quiz 3Break Even Point Quiz 5Break Even Point Quiz 6Break Even Point Quiz 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books