TRUE or FALSE: The break-even point for a business is where total revenue is the same as total costs. At this point the business is making neither a profit or a loss.
TRUE
FALSE
The normal method used to calculate the break-even point is: Break-even = total fixed costs / ___________
unit contribution (the difference between selling price and variable costs)
variable cost
fixed cost
revenue
TRUE or FALSE: Variable costs do not always change in proportion to output (e.g. bulk-buying discounts, or overtime paid to manufacturing employees)
Break-even analysis is difficult to use if the business makes .......
The same product
Makes more than one product
The point at which a business goes from loss into profit can be seen on:
a pie chart
a break-even chart
a bar chart
an organization chart
A fixed cost is one that:
does change as output changes
does not change as output changes
does change as profit changes
does not change as profit changes
Contribution in break-even analysis is the difference between:
fixed costs and variable costs
fixed costs and sales
sales and variable costs
profit and loss
The difference between the break-even output level and the expected output is the:
margin of safety
area of loss
total fixed costs
break-even revenue
Total costs in break-even analysis are shown by:
fixed costs plus direct costs
fixed costs plus variable costs
sales less fixed costs
sales less variable costs
