Tag: Break-Even Analysis

Accounting Multiple Choice Question – 24 August 2023

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

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Alex plc sells two products, X and Y.

  • sales (units) of X was 1,000 & Y was 2,000
  • selling price per unit of X was £22 & Y was £12
  • contribution per unit of X was £12 & Y was £4

Which would increase the company’s profit by £10,000?

Select ONE answer:

  1. a 30% increase in the sales of X
  2. a 50 % increase in the sales of both products
  3. an increase in the selling price of X by £1 and Y by £6
  4. a reduction in the variable costs of both products by £5

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 2

  1. Not correct
  2. Correct – current profit 1,000 units of X * £12 + 2,000 units of Y * £8 = £20,000. To increase profit by £10,000 then extra 50% of X & Y = £10,000
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 23 August 2023

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

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Alex plc manufactures and sells a single product.

At an output of 1,000 units per month the budget shows:

  • selling price – £120,000
  • variable cost – £40,000
  • fixed cost – £50,000
  • Profit – £30,000

Alex plc’s fixed costs are due to increase by £10,000 per month and the selling price will be increased to maintain the profit at £30,000.

What is the effect on the break-even point to the nearest unit?

Select ONE answer:

  1. decrease by 42 units
  2. increase by 42 units
  3. decrease by 125 units
  4. no change

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 2

  1. Not correct
  2. Correct – BEP £50k / £80 = 625 units == > New BEP £60k / £90 = 667 units == > an increase of 42 units
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 22 August 2023

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

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The information relates to the production of 50,000 units of product A:

  • selling price £25 per unit of A
  • variable costs £15 per unit of A
  • contribution £10 per unit of A

The fixed costs are £300,000.

The margin of safety is 20,000 units.

The unit selling price of A is increased by 10 %.

What is the percentage increase in the margin of safety?

Select ONE answer:

  1. 13.6%
  2. 20%
  3. 24.2%
  4. 30%

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 – SP £25 *1.1 = £27.5 so CM now £12.5 per unit. BEP now £300k / £12.5 = 24,000 units, therefore margin of safety now 26, 000 units an increase of 30%

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Accounting Multiple Choice Question – 20 August 2023

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

Photo by Nataliya Vaitkevich on Pexels.com

Assuming all other factors remain unchanged, the break-even point of a business can be lowered by increasing its?

Select ONE answer:

  1. budgeted sales
  2. fixed costs
  3. marginal costs
  4. selling prices

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

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

Accounting Multiple Choice Question – 19 August 2023

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

apple devices books business coffee
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The diagram shows a break-even chart.

Which line represents the margin of safety?

Select ONE answer:

  1. WX
  2. WY
  3. XY
  4. XZ

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
  4. Not correct

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