Tag: Break-Even Point

Accounting Multiple Choice Question – 23 December 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 Trading hopes to make £25,000 of profit next year.

One product is made: the Stafford garden shed.

Each Stafford shed is sold for £590 and has a variable cost of £240.

Monthly fixed costs are £4,275.

How many Stafford sheds does Alex Trading need to make next year and sell to achieve the target profit of £25,000?

Select ONE answer:

  1. 147 sheds
  2. 72 sheds
  3. 84 sheds
  4. 218 sheds

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 – The formula used to calculate the number of units required to achieve a target profit is — > Number of units = (annual fixed costs + target profit) / contribution per unit == > Contribution per unit = 590 – 240 = £350 per unit == > Annual fixed costs = 12 x £4,275 = £51,300 == > Number of units = (51,300 + 25,000) / 350 = 218 sheds

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Accounting Multiple Choice Question – 12 December 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 Trading Ltd has fixed costs of £100,000.

Alex Trading Ltd sells a single product for £25 per unit, and its contribution to sales ratio is 40 %.

What is the break-even point in units for Alex Trading Ltd?

Select ONE answer:

  1. 6,667
  2. 10,000
  3. 40,000
  4. 250,000

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 2

  1. Not correct
  2. Correct – 40% of £25 = £10 == > £100,000 FC / £10 = 10,000 units
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 17 October 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 graph shows a break-even chart.

What are the fixed costs?

Select ONE answer:

  1. £0
  2. £10k
  3. £20k
  4. £30k

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
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 12 September 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 following information relates to the budgeted and actual sales of a product.

  • sales volume in units: budgeted 25,000 AND actual 23,000
  • contribution per unit: budgeted £3 AND actual £4
  • fixed costs: budgeted £30,000 AND actual £30,000

Which change in the break-even point has been caused by the actual being different from the budgeted?

Select ONE answer:

  1. 25% better
  2. 25% worse
  3. 75% better
  4. 75% 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 – 30.000 /3 == > 30,000 / 4
  2. Not correct
  3. Not correct
  4. Not correct

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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.

Photo by Olya Kobruseva on Pexels.com

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