Break Even Analysis Quiz

The formula for Break Even Point is
1. Total Costs/Selling Price
2. Fixed Costs/Contribution
3. Fixed Costs/Selling Price
4. Total Costs/Contribution
Contribution is
1. Selling Price - Profit levels
2. Selling Price - Fixed Costs
3. Selling Price - Variable Costs
4. Selling Price - Total Costs
To calculate profits at a certain level of sales, the formula is
1. (Level of Sales - BEP) x Contribution
2. Fixed Costs/Contribution
3. Break Even Point x Selling Price
4. (Level of Sales) x Contribution
Examples of Fixed Costs are:
1. Rent
2. Materials
3. Advertising
4. Labour rate per unit
The Break Even Point occurs when
1. Revenue = Contribution
2. Revenue is greater than Costs
3. Revenue = Costs
4. Costs are greater than Revenue
If the Selling Price increases, what happens to the Break Even Point?
1. It rises by the same amount as the Selling Price rise
2. It rises
3. It falls
4. It stays the same
What is a difference between Fixed Costs and Variable Costs?
1. Fixed Costs vary with production, but Variable Costs will not change with the level of sales
2. Fixed Costs do not vary with production, but Variable Costs will change with the level of sales
If Variable Costs per unit increase, what will happen to the Break Even Point?
1. It will change by the exact amount of the Variable Costs rise
2. It will rise
3. It will stay the same
4. It will fall
On a Break Even Chart, the Fixed Costs line always starts at zero.
1. True
2. False
On a Break Even Chart, the BEP is where which 2 lines cross?
1. Fixed Costs and Variable Costs
2. Sales Revenue and Total Costs
3. Sales Revenue and Fixed Costs
4. Variable Costs and Sales Revenue