Break-even Analysis - Part 1 - MCQs with answers
1. The Break-even Point of a company is that level of sales income which will equal the sum of its fixed cost.a) True
b) False
View Answer / Hide Answer2. Which of the following are characteristics of B.E.P? a) There is no loss and no profit to the firm.
b) Total revenue is equal to total cost.
c) Contribution is equal to fixed cost.
d) All of the above.
View Answer / Hide AnswerANSWER: d) All of the above.
A) Elements of cost cannot be divided in different groups.
B) Fixed cost remains certain from zero production to full capacity.
C) Behavior of different costs is linear
D) Selling per price unit remains constant.
a) A, B, C
b) B, C, D
c) A, C, D
d) A, B, D
View Answer / Hide Answer4. While measuring break-even analysis, it is considered that during a specific period there will be no change in general price level, i.e., labor, cost of material and other overheads.a) True
b) False
View Answer / Hide Answer5. Which of the following are limitations of break-even analysis?A) Static concept
b) Capital employed is taken into account.
c) Limitation of non-linear behavior of costs
d) Limitation of presence of perfect competition
View Answer / Hide AnswerANSWER: A) Static concept
a) True
b) False
View Answer / Hide Answer7. Using equation method, Break-even point is calculated as a) Sales = Variable expenses + Fixed expenses + Profit
b) Sales = Variable expenses + Fixed expenses - Profit
c) Sales = Variable expenses - Fixed expenses + Profit
d) None of the above
View Answer / Hide AnswerANSWER: a) Sales = Variable expenses + Fixed expenses + Profit
a) 500 units
b) 1,000 units
c) 1,250 units
d) None of the above
View Answer / Hide Answer9. Contribution is also known as a) Contribution margin
b) Net Margin
c) Both a and b
d) None of the above
View Answer / Hide AnswerANSWER: a) Contribution margin
a) Rs 1.25 per unit
b) Rs 4 per unit
c) Rs 0.8 per unit
d) None of the above
View Answer / Hide Answer
