Tag: Break-Even Analysis

Accounting Multiple Choice Question – 20 July 2023

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

Photo by Pixabay on Pexels.com

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

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

Accounting Multiple Choice Question – 18 July 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

Contribution by product is an important aspect of costing.

How is it calculated?

Select ONE answer:

  1. income from sales plus fixed costs
  2. income from sales plus variable costs
  3. income from sales minus fixed costs
  4. income from sales minus 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 4

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

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

Accounting Multiple Choice Question – 5 July 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

The balance sheet of Lucy Ltd shows net assets of £0.5M.

Alex plc buys this business for £0.8M by issuing new share capital.

The fair value of the net assets acquired is £0.7M.

By how much do the net assets of Alex plc increase?

Select ONE answer:

  1. £0.3M
  2. £0.5M
  3. £0.7M
  4. £0.8M

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 – Dr Cash £0.8M Cr SC £0.8M then Dr Assets £0.7M Cr Cash £0.7M – left with Dr Assets £0.7M & Cash £0.1M Cr SC £0.8M

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

Accounting Multiple Choice Question – 3 July 2023

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

Photo by Pixabay on Pexels.com

X and Y are in partnership, sharing profits equally.

They agree to admit Z as an equal partner.

Z is to introduce capital into of the partnership worth £100,000.

The partnership goodwill is £60,000 and all adjustments are to be made in the capital accounts.

Which shows the correct situation after the admission of Z to the three partners’ capital accounts?

Select ONE answer:

  1. X a credit of £10k and Y a credit of £10k and Z a credit of £80k
  2. X a credit of £10k and Y a credit of £10k and Z a debit of £20k
  3. X a credit of £30k and Y a credit of £30k and Z a debit of £60k
  4. X a debit of £30k and Y a debit of £30k and Z a credit of £160k

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 – Step 1 – Dr Goodwill £60k Cr X Capital Account £30k and Y Capital Account £30k. Step 2 – Dr Cash £100k Cr Z Capital Account £100k. Step 3 (Goodwill w/o) Dr X Capital Account £20k Dr Y Capital Account £20k Dr Z Capital Account Cr Goodwill £60k
  2. Not correct
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 29 June 2023

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

Photo by Pixabay on Pexels.com

Alex plc manufactures a product called The Milford.

Information for the last two years on The Milford is as follows:

Year 1

  • variable unit costs £6.00
  • fixed overheads per annum £24,000
  • unit sales price £10

Year 2

  • variable unit costs £7.00
  • fixed overheads per annum £25,200
  • unit sales price £10

In both years, production of the Milford has been at break-even level.

What is the increase in production in year 2 compared with year 1 of the Milford?

Select ONE answer:

  1. £0.50
  2. £0.83
  3. £1.00
  4. £1.50

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 1

  1. Correct – Y1 £24k / (£10 – £6) – – > Y2 £25.2k / £10 – £7 = 2,400 extra units
  2. Not correct
  3. Not correct
  4. Not correct

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