Business Studies Multiple Choice Question – 31 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A business’s fixed costs are £67 800, selling price per unit is £12.87, and total variable costs per unit are £8.50. Which ONE of the following is the break-even level of output (to the nearest whole number)?

Select ONE answer only:

  1. 12 500 units
  2. 12 667 units
  3. 10 000 units
  4. 8 525 units
  5. 15 515 units

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 5 – Break-even level of output = Fixed costs / Contribution per unit. Contribution per unit = Selling price per unit – Variable costs per unit. Therefore the breakeven level of output is: £67 800 / (£12.87 – £8.50) = £67 800 / £4.37 = 15 515 units.

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Business Studies Multiple Choice Question – 30 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A business’s fixed costs are £75 000, selling price per unit is £10, and total variable costs per unit are £5.50. Which ONE of the following is the break-even level of output (to the nearest whole number)?

Select ONE answer only:

  1. 16 667 units
  2. 12 000 units
  3. 10 000 units
  4. 18 500 units
  5. 18 667 units

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 1 – Break-even level of output = Fixed costs / Contribution per unit. Contribution per unit = Selling price per unit – Variable costs per unit. Therefore the breakeven level of output is: £75 000 / (£10 – £5.50) = £75 000 / £4.50 = 16 667 units.

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Business Studies Multiple Choice Question – 29 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A business’s fixed costs are £90 000, selling price per unit is £3, and total variable costs per unit are £2.50. Which ONE of the following is the break-even level of output (to the nearest whole number)?

Select ONE answer only:

  1. 122 500 units
  2. 120 000 units
  3. 100 000 units
  4. 180 000 units
  5. 166 667 units

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 4 – Break-even level of output = Fixed costs / Contribution per unit. Contribution per unit = Selling price per unit – Variable costs per unit. Therefore the breakeven level of output is: £90 000 / (£3 – £2.50) = £90 000 / £0.50 = 180 000 units.

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Business Studies Multiple Choice Question – 28 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A business’s fixed costs are £60 000, selling price per unit is £10, and total variable costs per unit are £2.50. Which ONE of the following is the break-even level of output (to the nearest whole number)?

Select ONE answer only:

  1. 4 250 units
  2. 7 000 units
  3. 8 000 units
  4. 8 500 units
  5. 9 667 units

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 3 – Break even level of output = Fixed costs / Contribution per unit. Contribution per unit = Selling price per unit – Variable costs per unit. Therefore the breakeven level of output is: £60 000 / (£10 – £2.50) = £60 000 / £7.50 = 8 000 units.

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This work is licensed under a Creative Commons Attribution 4.0 International License.

Business Studies Multiple Choice Question – 27 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A business’s fixed costs are £30 000, selling price per unit is £5, and total variable costs per unit are £2.50. Which ONE of the following is the break-even level of output (to the nearest whole number)?

Select ONE answer only:

  1. 12 500 units
  2. 12 000 units
  3. 10 000 units
  4. 8 500 units
  5. 6 667 units

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 2 – Break even level of output = Fixed costs / Contribution per unit. Contribution per unit = Selling price per unit – Variable costs per unit. Therefore the breakeven level of output is: £30 000 / (£5 – £2.50) = £30 000 / £2.50 = 12 000 units.

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Business Studies Multiple Choice Question – 26 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A business’s fixed costs are £10 000, selling price per unit is £4, and total variable costs per unit are £1.50. Which ONE of the following is the break-even level of output (to the nearest whole number)?

Select ONE answer only:

  1. 2 500 units
  2. 2 857 units
  3. 4 000 units
  4. 4 500 units
  5. 6 667 units

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 3 – Break-even level of output = Fixed costs / Contribution per unit. Contribution per unit = Selling price per unit – Variable costs per unit. Therefore the breakeven level of output is: £10 000 / (£4 – £1.50) = £10 000 / £2.50 = 4 000 units.

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Business Studies Multiple Choice Question – 25 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Which ONE of the following is the correct definition of margin of safety?

Select ONE answer only:

  1. The amount by which total revenue has to grow before it passes the break-even of output.
  2. The amount by which total revenue can fall before a business is unable to cover its total fixed costs.
  3. The amount by which output can fall before a business reaches its break-even level of output.
  4. The amount by which the total revenue of a business exceeds its total costs.
  5. The amount by which a business’s actual output exceeds its planned level of output

What is the importance of measuring the break-even point to businesses?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 3 – The margin of safety is the difference between the level of output a business plans to achieve, or has actually achieved (ie number of items produced or sold, or number of customers served, as opposed to revenue generated), and the business’s breaks even level of output, which is the point at which a business covers its total costs (ie fixed and variable costs).

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This work is licensed under a Creative Commons Attribution 4.0 International License.