Break-even Analysis - Part 4 - MCQs with answers

Break-even Analysis - Part 4 - MCQs with answers


1. Breakeven point can be calculated in terms of units as well as in terms of amount.

a) True
b) False

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ANSWER: a) True



2. Which of the following statements are true?

a) If per unit information is given in question and no specific direction available, B.E.P should e calculated in terms of amount as well as in units.

b) If technique of P/V ratio is to be used, B.E.P should be obtained in terms of amount.

c) B.E.P is measured as Sales-Margin of safety

d) All of the above

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ANSWER: d) All of the above



3. Determine B.E.P in units and amount if Units produced if Rs 10,000, Fixed cost is Rs 40,000, Selling price is Rs 50 per unit and Variable cost us Rs 30 per unit.

a) Rs 40 per unit, Rs 2,00,000
b) Rs 50 per unit, Rs 10,00,000
c) Rs 20 per unit, Rs 1,00,000
d) None of the above

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ANSWER: c) Rs 20 per unit, Rs 1,00,000



4. Determine B.E.P if Sales is Rs 1,00,000, Variable cost is Rs 50,000 and Profit is Rs 20,000.

a) Rs 60,000
b) Rs 40,000
c) Rs 80,000
d) None of the above

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ANSWER: a) Rs 60,000



5. What will be the B.E.P if P/V ratio is 20% and Fixed cost is Rs 40,000.

a) Rs 2,00,000
b) Rs 4,00,000
c) Rs 6,00,000
d) None of the above

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ANSWER: a) Rs 2,00,000



6. What will be the B.E.P if Variable cost ratio is 70% and Fixed cost is Rs 36,000.

a) Rs 3,20,000
b) Rs 2,20,000
c) Rs 1,20,000
d) None of the above

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ANSWER: c) Rs 1,20,000



7. Calculate B.E.P if Fixed cost is Rs 1,50,000, Variable cost is Rs 2,00,000 and Profit is Rs 1,50,000.

a) Rs 2,00,000
b) Rs 2,50,000
c) Rs 3,00,000
d) None of the above

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ANSWER: b) Rs 2,50,000



8. Given Sales in first and second year is Rs 80,000 and Rs 90,000 respectively. Also, profit is Rs 10,000 and Rs 14,000 respectively. What is the break-even point in rupees?

a) Rs 10,000
b) Rs 24,000
c) Rs 55,000
d) None of the above

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ANSWER: c) Rs 55,000



9. Margin of safety is that sales which is above Break-even point.

a) True
b) False

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ANSWER: b) False



10. Margin of safety can be increased by

a) Decrease in setting price
b) Decline in volume of production
c) Reduction in fixed or the variable costs or both
d) None of the above

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ANSWER: c) Reduction in fixed or the variable costs or both


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