Month: March 2023

A company makes two products X & Y.

• selling price – X is £10 & Y is £12
• variable costs per unit – X is £4 and Y is £8
• maximum sales (units) – X is 4,000 & Y is 14,000

Fixed costs are £48,000.

4,000 units of X are sold.

How many units of Y must be sold to break even?

Select ONE answer:

1. 2,000
2. 3,000
3. 6,000
4. 12,000

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 3

1. Not correct
2. Not correct
3. Correct = X contribution is £10 – £4 = £6 * 4,000 = £24,000 — > therefore Y sales must be £48,000 – £24,000 = £24,000 / (£12 – £8) = 6,000 units
4. Not correct

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

The cost of producing 2,000 units of a product is shown below:

• Insurance – £2k
• Labour – £30k
• Materials – £10k
• Rent – £6k
• telephone rental – £4k

What is the variable cost of one unit?

Select ONE answer:

1. £20
2. £22
3. £23
4. £24

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 1

1. Correct – 30K + 10K = 40k / 2,000 units = £20 per unit
2. Not correct
3. Not correct
4. Not correct

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

What will cause under-absorption of fixed production overheads?

Select ONE answer:

1. absorption of overheads is based on actual expenditure and actual activity
2. actual expenditure of overheads is below budget expenditure
3. actual activity is above budgeted activity
4. actual activity is below budgeted activity and actual expenditure is as budgeted

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

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

The break-even chart for a product is shown below.

What does XY represent?

Select ONE answer:

1. 1.fixed costs
2. 2.gross profit
3. 3.net loss
4. 4.variable costs

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 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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