BREAK EVEN ANALYSIS QUIZ
1.
|
Fixed Expenses do not change in
total when
there is a modest change in sales.
|
True
|
False
|
2.
|
An example of a fixed expense would be a 5% sales commission.
|
True
|
False
|
3.
|
Property taxes and rent are often fixed expenses.
|
True
|
False
|
4.
|
Variable expenses change in
total as
volume changes.
|
True
|
False
|
5.
|
An example of a variable expense is an office manager's monthly
salary.
|
True
|
False
|
6.
|
A retailer's cost of goods sold is an example of a variable
expense.
|
True
|
False
|
7.
|
Contribution margin is defined as sales (or revenues) minus
variable expenses.
|
True
|
False
|
8.
|
Break-even point is the point where revenues equal the total of
all expenses including the cost of goods sold.
|
True
|
False
|
9.
|
The break-even point in £ of revenues is equal to the total of the fixed expenses divided
by the contribution margin per unit.
|
True
|
False
|
10.
|
If a company requires a profit of £30,000 (instead of breaking
even), the £30,000 should be combined with the fixed expenses in order to
compute the point at which the company will earn £30,000.
|
True
|
False
|
11.
|
If a company has mixed expenses, the fixed component can be
combined with the company's fixed expenses and the variable component can be
combined with the company's variable expenses.
|
True
|
False
|
12.
|
Decreasing a company's fixed expenses should reduce the
break-even point.
|
True
|
False
|
13.
|
The contribution margin per unit is the selling price per unit
minus the fixed expenses per unit.
|
True
|
False
|
14.
|
Break-even analysis is useful for companies that sell products,
but it is not useful for companies that provide services.
|
True
|
False
|
Use this information to answer questions 15
through 17:
|
15.
|
What is the company's contribution margin?
|
16.
|
What is the break-even point in units?
|
17.
|
If the company wants to earn a profit of £42,000 instead of
breaking even, what is the number of units the company must sell?
|
Use this information to answer questions 18
through 20:
|
18.
|
What is the company's contribution margin ratio?
|
19.
|
What is the break-even point in £?
|
20.
|
If the company wants to earn a profit of £35,000 instead of
breaking even, what is the amount of sales or revenue £ the company must
achieve?
|
ANSWERS:
1) T
2) F
3) T
4) T
5) F
6) T
7) T
8) T
9) F
10)
T
11)
T
12)
T
13)
F
14)
F
15)
£10
16)
14000
17)
18200
18)
30%
19)
£256,667
20)
£373,333
COACHING CLASSES FOR
PROFESSIONAL STUDENTS
ICMAP
semester 1-4
FUNDAMENTALS OF FA
ECONOMICS
FUNDAMENTALS OF COST ACCOUNTING
BUSINESS MATHS & STATISTICS
FINANCIAL ACCOUNTING
MANAGEMENT ACCOUNTING
ICAP
MODULE A,B & D
QUANTITATIVE METHODS
ECONOMICS
FINANCIAL ACCOUNTING I
COST ACCOUNTING
PIPFA (COMPLETE)
FOUNDATION
INTERMEDIATE
FINAL
ICSP
ECONOMICS ENVIRONMENT
INTRODUCTION TO ACCOUNTING
BUSINESS MATHEMATICS & STATISTICS
COMMERCIAL & INDUSTRIAL LAWS
FINANCIAL ACCOUNTING & REPORTING
COACHING CLASSES OF
B.COM, M.COM, BBA,
MBA, MA-ECONOMICS,
O/A LEVELS ETC ARE
ALSO AVAILABLE.
CONTACT:
KHALID AZIZ
0322-3385752
R-1173, ALNOOR
SOCIETY, BLOCK
19,
F.B.AREA, KARACHI.
No comments:
Post a Comment