Business Studies Multiple Choice Question – 12 January 2022

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

Business Studies
Photo by Andrea Piacquadio on Pexels.com

At the Stafford Vintage Trade Fair, held on 1 April 2021, Lucy managed to break-even by selling 40 items of costume jewellery she had made
that week.

Assuming fixed costs of £60, and an average selling price of £9, which one of the following represents Lucy’s variable cost per unit?

Select ONE answer:

  1. £0.66
  2. £1.50
  3. £6.66
  4. £7.50

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

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

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct -Break-even = Fixed cost (FC) / Selling Price-Average Variable costs, OR Contribution = FC/BE, OR average variable costs are total variable costs divided by output OR variable costs = sales revenue minus FC divided by breakeven OR variable costs are costs which vary with output OR Break-even is the output level where total costs equals total revenue. ==> 40 = £60/£9 – £7.50

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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