Tag: Break-Even Analysis

The total cost of making product X is shown on the graph.

What is the variable cost per unit?

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 – £1,500 – £1,000 FC = £500 / 1,000 units = £0.50 per unit
2. Not correct
3. Not correct
4. Not correct

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

Alex plc provides the following information:

• total fixed costs – £10,000
• unit selling price – £1
• variable unit production costs – £0.75

What is the total sales revenue in £ needed to break even?

Select ONE answer:

1. 2,500
2. 7,500
3. 10,000
4. 40,000

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – £10k / £0.25 = 40,000 units

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

What does the line XY show?

Select ONE answer:

1. Fixed costs per unit become less as production increases.
2. Total fixed costs become less as production increases.
3. Total variable costs become less as production increases.
4. Variable costs per unit become less as production increases.

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.

Alex plc sells its product for £10 per unit and each unit has variable costs of £6 per unit.

Alex plc’s fixed costs for the year are:

• factory rent – £30k
• other fixed costs – £70k

What is the break-even point?

Select ONE answer:

1. 10 000 units
2. 16 667 units
3. 17 500 units
4. 25 000 units

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 – (£30k + £70k) / (£10 – £6)

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

Lucy Ltd has sales of £192,000, fixed costs of £40,000 and a contribution / sales ratio of one-third.

What are the profits of Lucy Ltd in £s?

Select ONE answer:

1. 24,000
2. 50,667
3. 64,000
4. 88,000

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 1

1. Correct – £192k / 3 = £64k – £40k = £24k
2. Not correct
3. Not correct
4. Not correct

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