Short Assessment - Break-even

Question 1

Question

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.

Answer

TRUE
FALSE

Question 2

Question

The normal method used to calculate the break-even point is: Break-even = total fixed costs / ___________

Answer

unit contribution (the difference between selling price and variable costs)
variable cost
fixed cost
revenue

Question 3

Question

TRUE or FALSE: Variable costs do not always change in proportion to output (e.g. bulk-buying discounts, or overtime paid to manufacturing employees)

Answer

TRUE
FALSE

Question 4

Question

Break-even analysis is difficult to use if the business makes .......

Answer

The same product
Makes more than one product

Question 5

Question

The point at which a business goes from loss into profit can be seen on:

Answer

a pie chart
a break-even chart
a bar chart
an organization chart

Question 6

Question

A fixed cost is one that:

Answer

does change as output changes
does not change as output changes
does change as profit changes
does not change as profit changes

Question 7

Question

Contribution in break-even analysis is the difference between:

Answer

fixed costs and variable costs
fixed costs and sales
sales and variable costs
profit and loss

Question 8

Question

The difference between the break-even output level and the expected output is the:

Answer

margin of safety
area of loss
total fixed costs
break-even revenue

Question 9

Question

Total costs in break-even analysis are shown by:

Answer

fixed costs plus direct costs
fixed costs plus variable costs
sales less fixed costs
sales less variable costs

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Short Assessment - Break-even

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Resource summary

Question 1

Question 2

Question 3

Question 4

Question 5

Question 6

Question 7

Question 8

Question 9

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	Created by Carina Storm almost 6 years ago