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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