This quiz works best with JavaScript enabled. Home > Finance > Accounting > Cost Accounting > Break Even Analysis > Break Even Point – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Break Even Point Quiz 7 (29 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the break-even output if fixed costs are £ 30, 000, selling price per unit is £ 20 and variable costs per unit are £ 8? A) £ 3, 750. B) £ 2, 500. C) 2, 500. D) £ 1, 500. Show Answer Correct Answer: C) 2, 500. 2. Some business costs are classified as fixed costs because they A) Must be paid within a set time. B) Don't change when sales go up or down. C) Are unpredictable and must be estimated. D) Cost all businesses the same amount. Show Answer Correct Answer: B) Don't change when sales go up or down. 3. A computer has been discounted by 32%. The original cost was $ 900. What is the new price? A) $ 288. B) $ 612. C) $ 1188. D) $ 600. Show Answer Correct Answer: B) $ 612. 4. Most businesses receive the bulk of their income from A) Capital. B) Dividends. C) Sales revenue. D) Return on investment. Show Answer Correct Answer: C) Sales revenue. 5. State one advantage of using a break even chart (1 mark) A) Is based on predicted costs and revenues. B) Can calculate the level of profit or loss at different levels. C) Ignores changes in variable costs. D) Does not take account of external factors. Show Answer Correct Answer: B) Can calculate the level of profit or loss at different levels. 6. What enables managers to calculate the level of output at which revenue from sales and total costs are equal? A) Break-even analysis. B) Break-even output. C) Margin of safety. D) Unit contribution. Show Answer Correct Answer: A) Break-even analysis. 7. What is the profit (or loss) if 10 units were sold at a selling price of £ 85, the variable costs per unit was £ 25 and fixed costs were £ 300? A) 300. B) £ 300. C) (£ 300). D) £ 600. Show Answer Correct Answer: B) £ 300. 8. What is the formula for calculating profit using the break-even concept? A) Total contribution-Selling price. B) Fixed costs / Total contribution. C) Total contribution-Fixed costs. D) Fixed costs-Total contribution. Show Answer Correct Answer: C) Total contribution-Fixed costs. 9. Which of the following would enable you to calculate the total costs? A) Fixed costs-total variable costs. B) Average costs + fixed cost. C) Variable costs + average costs. D) Fixed costs + total variable costs. Show Answer Correct Answer: D) Fixed costs + total variable costs. 10. Sales price x quantity is the formula for which of the following? A) Revenue. B) Profit. C) Total costs. D) Total variable costs. Show Answer Correct Answer: A) Revenue. 11. What is a business doing when it sells output beyond the break-even point? A) Making a loss. B) Making a profit. C) Making neither a profit or loss. D) None of above. Show Answer Correct Answer: B) Making a profit. 12. What is the definition of a variable 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 vary with output or sales. D) A cost which does not vary with output or sales. Show Answer Correct Answer: C) A cost which does vary with output or sales. 13. When a business has made enough money to pay its costs and begin to make a profit, it has reached its A) Fixed cost. B) Break-even point. C) Selling price. D) Variable-cost margin. Show Answer Correct Answer: B) Break-even point. 14. My total costs are £ 50, 000 when selling 100 items. My fixed costs are £ 20, 000. What must be the variable cost of one item? A) £ 300. B) Cannot be calculated. C) £ 200. D) £ 500. Show Answer Correct Answer: A) £ 300. 15. What could be a cause of cashflow problems? A) Competitors increase promotion. B) Customers pay too little for products. C) Sales may not be as high as expected. D) Sales may be high than expected. Show Answer Correct Answer: C) Sales may not be as high as expected. 16. It may be difficult for a new business to predict its variable costs because new businesses A) Don't have access to industry figures. B) Are sometimes short of working capital. C) Don't have past sales records. D) May have inexperienced employees. Show Answer Correct Answer: C) Don't have past sales records. 17. Businesses calculate break-even in pounds so they know the A) Amount of the business after tax-earnings. B) Total pounds value of the stock on hand. C) Total pounds sales needed to reach break-even. D) Amount the business can spend on new purchases. Show Answer Correct Answer: C) Total pounds sales needed to reach break-even. 18. What is the formula for contribution? A) Selling price-cost price. B) Fixed costs-variable costs. C) Selling price-variable cost. D) Cost price-selling price. Show Answer Correct Answer: C) Selling price-variable cost. 19. Costs that do not vary with output (in the short run) A) Fixed costs. B) Variable cost. C) Total cost. D) Average cost. Show Answer Correct Answer: A) Fixed costs. 20. The difference between current output and break-even level of output A) Purchasing economy of scale. B) Diseconomies of scale. C) Contribution per unit. D) Margin of safety. Show Answer Correct Answer: D) Margin of safety. 21. Frederick is revising his formulae for a test on break-even. He has mixed up his revision notes. What is the formulas for Break-even A) Total revenue-total cost. B) Fixed cost + variable cost. C) Total revenue = total cost. D) Actual output-break-even point. Show Answer Correct Answer: C) Total revenue = total cost. 22. According to the following data (Selling Price= $ 450, Variable Cost= $ 150, Fixed Cost= $ 53.000) Calculate the breakeven ***3 minutes to answer*** A) 176.67. B) 167.66. C) 176.66. D) 167.76. Show Answer Correct Answer: C) 176.66. 23. 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 much profit will they make if they sell 344 haircuts? A) 340 hair cuts. B) $ 1, 944. C) $ 1940. D) $ 340. Show Answer Correct Answer: B) $ 1, 944. 24. The best definition of fixed costs are those that do not vary with: A) Number of workers. B) Time. C) Seasons. D) Output. Show Answer Correct Answer: D) Output. 25. The formula to calculate revenue is: A) REVENUE = FIXED COSTS + VARIABLE COSTS. B) REVENUE = VARIABLE COSTS * PRICE. C) REVENUE = UNITS SOLD * PRICE. D) REVENUE = UNITS SOLD * TOTAL COSTS. Show Answer Correct Answer: C) REVENUE = UNITS SOLD * PRICE. 26. Which of the following is an example of a fixed cost for a cafe? A) Coffee. B) Managers' salaries. C) Cakes. D) Workers' wages. Show Answer Correct Answer: B) Managers' salaries. 27. Total contribution =? A) Variable costs less fixed costs. B) Total sales less fixed costs. C) Total selling price less fixed costs. D) Total sales less total variable costs. Show Answer Correct Answer: D) Total sales less total variable costs. 28. Which one of the following variables is often not shown on a break even diagram? A) Total fixed costs. B) Total revenue. C) Total costs. D) Total variable costs. Show Answer Correct Answer: D) Total variable costs. 29. At a local concert hall, the owner charges $ 7 per ticket. The owner must pay his band $ 1200. Every customer receives a brochure that costs the owner $ 2 for each person.How many people must attend for him to breakeven? A) 240 people. B) 170 people. C) 600 people. D) 133 people. Show Answer Correct Answer: A) 240 people. ← PreviousRelated 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 6 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books