T-levels Mgt & Admin: Break-even

Which of the following are examples of variable costs? (Multiple correct answers)

• Rent

• Raw material

• Sales commissions

• Packaging

Which of the following are examples of fixed costs? (Multiple correct answers)

• Electricity

• Insurance

• Packaging

• Raw materials

Which of the following calculations gives the total costs of a business?

• Adding fixed costs to sales revenue

• Subtracting variable costs from sales revenue

• Adding variable costs to fixed costs

• Multiplying sales revenue and fixed costs

What would a business's total variable costs be for the month if their output for the month was zero.

• Equal to fixed costs

• Equal to sales revenue

• Zero

• Impossible to calculate

At what point does the total sales revenue equal total costs?

• Break-even

• Total costs

• Contribution

• Total variable costs

The formula for calculating break-even sales value is:

• Fixed costs / (Selling price – Variable cost per unit)

• Selling price × Fixed costs / (Contribution margin)

• Fixed costs / (Selling price + Variable cost per unit)

• Fixed costs / (Selling price + Variable cost per unit)

What are fixed costs divided by when calculating the break-even point? (Multiple correct answers)

• Variable costs + Sales price per unit

• Contribution

• Sales price per unit x Fixed costs

• Sales price per unit - variable cost per unit

A baker's variable costs per loaf of bread are 40p and their daily fixed costs are £120.

If 250 loaves are produced and sold daily at £1 each, what is the baker's daily profit?

• £40

• £30

• £20

• £10

The formula for calculating break-even point (units) is:

• Fixed costs / (Selling price + Variable cost per unit)

• Selling price – Variable cost per unit

• Fixed costs / (Selling price – Variable cost per unit)

• Selling price × Fixed costs / (Contribution margin)

When you calculate the break-even units, the formula may produce a number with decimals.

The correct way to handle a decimal in this case is:

• Always round down, a partial unit cannot be sold

• Always round up, a partial unit cannot be sold

• Keep as a decimal, a partial unit can be sold

• Re-calculate until another result is achieved