In a break-even analysis, what is the break-even point?

The level of output where total costs equal total revenue

The minimum level of output to avoid losses

The maximum profit a business can achieve

The point where fixed costs are zero

What is the formula to calculate the break-even point in units?

Break-even point = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

Break-even point = Fixed Costs + Variable Costs / Selling Price per Unit

Break-even point = Total Revenue / Total Costs

Break-even point = Variable Costs / Selling Price per Unit

If a company reduces its variable costs per unit, what will happen to the break-even point?

It will become impossible to determine

Which of the following would likely lead to a lower break-even point?

Increasing the selling price per unit

Decreasing the number of units sold

What does the contribution margin represent in break-even analysis?

The amount remaining from sales after variable costs are deducted

The total sales revenue generated

The profit made on each unit sold

The total fixed costs of the business

If a company wants to lower its break-even quantity, which of the following strategies could be effective?

Decrease variable costs per unit

Increase total production at current cost levels

Reduce the selling price per unit

What is the relationship between the break-even point and profit?

Below the break-even point, a company incurs losses

At the break-even point, profits are maximized

The break-even point guarantees a profit

Above the break-even point, fixed costs increase

How can a business calculate its break-even point in sales dollars?

Break-even sales = Fixed Costs / Contribution Margin Ratio

Break-even sales = Total Costs / Average Sales Price

Break-even sales = (Selling Price - Fixed Costs) / Variable Costs

Break-even sales = Fixed Costs + Variable Costs

In break-even analysis, what does the break-even point represent?

The point at which total revenue equals total costs

The point at which variable costs exceed total revenue

The point at which total revenue is less than total costs

The point at which fixed costs are recovered

Which formula can be used to calculate the break-even point in units?

rac{Fixed ext{ }Costs}{Selling ext{ }Price ext{ }per ext{ }Unit - Variable ext{ }Cost ext{ }per ext{ }Unit}

Fixed ext{ }Costs + Variable ext{ }Costs

Fixed ext{ }Costs imes Selling ext{ }Price ext{ }per ext{ }Unit

Variable ext{ }Costs - Selling ext{ }Price ext{ }per ext{ }Unit

What effect does an increase in variable costs have on the break-even point?

It increases the break-even point

It makes the break-even point dependent on fixed costs only

It has no effect on the break-even point

It decreases the break-even point

How can a business reduce its break-even point?

By decreasing fixed costs or variable costs

By increasing selling prices only

By increasing the number of products sold

What does a break-even chart typically illustrate?

The relationship between total revenue, total costs, and the break-even point

The impact of marketing expenses on sales

The variance between budgeted and actual sales

The historical profits of the business over time

What is the contribution margin per unit?

Selling price per unit minus variable cost per unit

Total revenue divided by total units sold

Selling price per unit plus fixed costs

Fixed costs divided by number of units produced

Why is the break-even analysis important for new businesses?

It helps determine the minimum sales needed to avoid losses

It predicts exact future profits

It reveals the best marketing strategy to use

What happens to the break-even point if a business increases its selling price?

The break-even point stays the same

The break-even point becomes irrelevant

What is considered a limitation of break-even analysis?

It assumes that all units produced are sold

It accounts for fluctuations in market conditions

It incorporates taxes and interest expenses in calculations

It includes varying selling prices for different customer segments

Break Even Analysis in Business

Break even + dekkingsbijdrage

Related quizzes

Related quizzes