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Costs, Revenue, Profit and Break even Flashcards | StudBud
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Costs, Revenue, Profit and Break even
Costs, Revenue, Profit and Break even
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Revision quiz for Break Even
Flashcards
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Questions
14
Answers
1
Break even is expressed in terms of what?
Number of units
amount in $
amount in £
revenue
2
One
benefit
to using a breakeven analysis is
margin of safety is unknown
Margin of safety is known
Costs are unknown
The owner can make adjustments to try to make profit sooner
3
How is total revenue calculated?
fixed costs + variable costs
Income minus costs
selling price x units sold
variable cost per unit x units sold
4
Your business has a breakeven of 650 units and sells 1000 units what is your margin of safety
1000-650= £350
1000-650=350 units
1650
650
5
An
INCREASE
in VARIABLE
COSTS
will mean
profit levels will rise
A company must sell more units to break even
An increase in staff
profit levels will fall
6
A
risk
of not using breakeven analysis is
Margin of safety is known
Costs are unknown
The owner can make adjustments to try to make profit sooner
Margin of safety is unknown
7
If a company
DECREASES
their fixed
COST
S
They will make more profit
Their breakeven point will be lower
They will have to look for new products to sell
They will have to sell more units to break even
8
Which line on a break even chart is always a straight, horizontal one?
Fixed cost
Total costs
Variable costs
Total revenue
9
On a breakeven chart
profit
is shown .......
On the y axis
To the right of the breakeven point
To the left of the breakeven point
on the x axis
10
Total costs are .....
variable costs
start up costs
Fixed costs
Fixed costs plus variable costs
11
Breakeven point is the point where
The company neither makes a profit or a loss
sales revenue and total costs are equal
a business goes into liquidation
A start up business begins to trade
12
What label do you give to the vertical (Y) axis?
Costs
Revenue
Costs and Revenue
Output
13
Fixed costs =
£1000
, Sell price =
£15.00
p/u, Variable costs =
£3.50
p/u Calculate breakeven
87
87 units
£87
£80 units
14
Which of these is an example of a variable cost?
Utility bills
Rent
Salaries
Raw materials
