Short Assessment - Break-even

Description

Break-even Sources of Finance Cash-Flow
Carina Storm
Quiz by Carina Storm, updated more than 1 year ago
Carina Storm
Created by Carina Storm over 5 years ago
175
1

Resource summary

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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