This quiz works best with JavaScript enabled. Home > Finance > Accounting > Cost Accounting > Break Even Analysis > Break Even Point – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Break Even Point Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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. 2. The net cash flow is (300) and the opening balance is 800. What is the closing balance? A) (500). B) 500. C) (1200). D) 1200. Show Answer Correct Answer: B) 500. 3. How is break even point measures? A) Dollars. B) Profit. C) Loss. D) Items. Show Answer Correct Answer: D) Items. 4. Which one of the following would be included in the calculation of total costs? A) Refund to a customer. B) Revenue. C) Rent of premises. D) Selling price. Show Answer Correct Answer: C) Rent of premises. 5. 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. 6. 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. 7. Which one of the following statements is true about the break-even point? A) Total costs are greater than total revenue. B) Total costs are less than total revenue. C) Variable costs are equal to total revenue. D) Total costs are equal to total revenue. Show Answer Correct Answer: D) Total costs are equal to total revenue. 8. What is a business doing at the break even point? A) Producing the startup output. B) Making neither a profit nor a loss. C) Making a profit. D) Making a loss. Show Answer Correct Answer: B) Making neither a profit nor a loss. 9. The sources of money generated by the sale of products or services. A) Revenue. B) Net Loss. C) Net Income. D) Expenses. Show Answer Correct Answer: A) Revenue. 10. What are fixed costs? A) The cost of making one unit of output. B) Costs that vary with the level of output. C) Costs that do not vary with the level of output. D) Total costs. Show Answer Correct Answer: C) Costs that do not vary with the level of output. 11. 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) £ 15, 000. B) Not possible to calculate. C) £ 3, 750. D) £ 11, 250. Show Answer Correct Answer: C) £ 3, 750. 12. If an individual is paid 5 euros for every futbol she sews, this is considered a A) Fixed cost. B) Variable cost. C) Non-balance sheet cost. D) Sunk cost. Show Answer Correct Answer: B) Variable cost. 13. A bakery has weekly fixed costs of $ 600. The variable costs during one week of operation were $ 1800 and the output achieved was 6000 loaves. The average cost of each loaf was A) $ 0.40. B) $ 4.00. C) $ 0.10. D) $ 0.30. Show Answer Correct Answer: A) $ 0.40. 14. Which of the following is a limitation of break-even? A) It helps projected sales. B) It is based on multiple products. C) It assumes all units produced are sold. D) It considers stock wages. Show Answer Correct Answer: C) It assumes all units produced are sold. 15. If total fixed costs of a business are $ 2 000 per week, variable costs are $ 3 per unit and the firm produces 500 units per week, then the average total cost is: A) $ 2003. B) $ 5. C) $ 3. D) $ 7. Show Answer Correct Answer: D) $ 7. 16. Formula for unit contribution = A) Selling price x variable cost per unit. B) Selling price + variable cost per unit. C) Selling price / variable cost per unit. D) Selling price-variable cost per unit. Show Answer Correct Answer: D) Selling price-variable cost per unit. 17. A breakeven analysis would be interesting for A) An entrepreneur. B) A potential investor. C) A business owner. D) All of the above. Show Answer Correct Answer: D) All of the above. 18. What is break even A) When there is no profit or loss. B) When there is profit and loss. C) When there is revenue and loss. D) When there is a loss. Show Answer Correct Answer: A) When there is no profit or loss. 19. Which economy of scale is being described here? "Banks will often offer businesses lower rate of interest when they take a large amount of loan." A) Technical. B) Managerial. C) Marketing. D) Financial. Show Answer Correct Answer: D) Financial. 20. According to the following data (Selling Price= $ 12.500, Variable Cost= $ 9.000, Fixed Cost= $ 44.000) Calculate the breakeven ***3 minutes to answer*** A) 12.58. B) 12.55. C) 12.56. D) 12.57. Show Answer Correct Answer: D) 12.57. 21. Frederick is revising his formulae for a test on break-even. He has mixed up his revision notes. What is the formulas for Margin of safety A) Fixed cost + variable cost. B) Total revenue-total cost. C) Actual output-break-even point. D) Total revenue = total cost. Show Answer Correct Answer: C) Actual output-break-even point. 22. Which of these breakeven points for a certain product provides the best business opportunity A) This is a trick question it depends on the stock market return. B) 8700 units sold. C) 87 units sold. D) 870 units sold. Show Answer Correct Answer: C) 87 units sold. 23. Which one of the following is the best definition of economies of scale? A) Costs fall as output increases. B) Costs per unit fall as the firm expands. C) Average costs rise as the firm expands. D) Fixed costs fall as output increases. Show Answer Correct Answer: B) Costs per unit fall as the firm expands. 24. What could be a cause of business cash flow problems? A) A poor use of marketing. B) Competitors managing costs effectively. C) Customer may be slow (weeks and months) paying for goods and services. D) Poor choice of overhead suppliers. Show Answer Correct Answer: C) Customer may be slow (weeks and months) paying for goods and services. 25. Marketing expenses are usually a A) Variable cost. B) Fixed cost. C) Waste of money. D) Transitive cost. Show Answer Correct Answer: B) Fixed cost. 26. Which one is an example of a fixed cost? A) Temporary wages. B) Materials. C) Resources. D) Rates. Show Answer Correct Answer: D) Rates. 27. The best definition of variable costs is: A) They vary with the prices charged by suppliers. B) They vary with tax rates set by government. C) They vary with the number of units produced. D) They vary over time. Show Answer Correct Answer: C) They vary with the number of units produced. 28. Which of these statements is true about break even analysis? A) Helps to identify fixed and variable costs. B) Helps to set the selling price. C) Helps to calculate future revenue. D) None of these. Show Answer Correct Answer: D) None of these. 29. One of the limitations of break-even charts is: A) They cannot be used to calculate profit. B) They cannot show the safety margin. C) They are based on the assumption that all output is sold. D) They are based on the assumption that the business makes a profit at all levels of output. Show Answer Correct Answer: C) They are based on the assumption that all output is sold. 30. Selling price is £ 10, Variable Cost is £ 5, Fixed Cost is £ 500. What is the break even point? A) 1000 items'. B) 100 items. C) £ 10. D) £ 100. Show Answer Correct Answer: B) 100 items. ← 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 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books