Break-even Analysis - Part 3 - MCQs with answers

Break-even Analysis - Part 3 - MCQs with answers


1. P/V ratio can be calculated on the basis of variable cost ratio as

a) 1 - Variable Cost Ratio
b) 1 + Variable Cost Ratio
c) 1/Variable Cost Ratio
d) None of the above

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ANSWER: a) 1-Variable Cost Ratio



2. Determine P/V ratio if Sales is Rs 80,000 and Variable cost is Rs 60,000.

a) 40%
b) 25%
c) 50%
d) None of the above

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ANSWER: b) 25%



3. Determine P/V ratio if Sales is Rs 1,00,000, Fixed cost is Rs 30,000 and Profit is Rs 20,000.

a) 25%
b) 50%
c) 45%
d) None of the above

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ANSWER: b) 50%



4. Determine P/V ratio if Sales per unit is Rs 10 and Variable cost per unit is Rs 7.

a) 25%
b) 50%
c) 45%
d) 30%

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ANSWER: d) 30%



5. Compute P/V ratio if variable cost ratio is 60%.

a) 40%
b) 50%
c) 45%
d) 30%

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ANSWER: a) 40%



6. Given sales is Rs 2,00,000 and Rs 4,00,000 in year 2013 and 2014 respectively. Profit is Rs -10,000 and Rs 20,000 in 2013 and 2014 respectively. Compute P/V ratio.

a) 40%
b) 30%
c) 25%
d) 50%

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ANSWER: b) 30%



7. Given sales is Rs 2,00,000 and Rs 4,00,000 in year 2013 and 2014 respectively. Cost is Rs 1,40,000 and Rs 2,40,000 in 2013 and 2014 respectively. Compute P/V ratio.

a) 40%
b) 30%
c) 25%
d) 50%

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ANSWER: d) 50%



8. A company produces and sells three types of products namely X, Y and Z. Total sales per month is Rs 60,000 in which the share of these three goods are 40%, 40% and 20% respectively. Variable costs of these three goods are 40%, 50% and 60% respectively. Compute combined P/V ratio.

a) 40%
b) 52%
c) 25%
d) 50%

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ANSWER: b) 52%



9. Profit on sales is measured as

a) Sales*P/V Ratio – Fixed cost

b) Sales*P/V Ratio + Fixed cost

c) Sales + P/V Ratio + Fixed cost

d) None of the above

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ANSWER: a) Sales*P/V Ratio – Fixed cost



10. Sales for desired profit is measured as

a) (Fixed cost + profit)/ (P/V Ratio)

b) (Fixed cost + profit) * (P/V Ratio)

c) (Fixed cost - profit)/ (P/V Ratio)

d) None of the above

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ANSWER: a) (Fixed cost + profit)/ (P/V Ratio)


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