Accounting Multiple Choice Question – 20 July 2023

The following information relates to the budgeted and actual sale of a product.

• BUDGET – sales volume in units 40,000 + contribution per unit £2 + fixed costs (total) £30,000
• ACTUAL – sales volume in units 36,000 + contribution per unit £2.5 + fixed costs (total) £30,000

What change in the break-even point has been caused by actual sales being different from budget?

Select ONE answer:

1. 20% better
2. 20 % worse
3. 80% better
4. 80 % worse

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 – BEP = FC / CM per unit = = > £30,000 / £2 = £15,000 to £30,000 / £2.5 = £12,000 Therefore 20% better
2. Not correct
3. Not correct
4. Not correct

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