Break-even Analysis - Part 6 - MCQs with answers

Break-even Analysis - Part 6 - MCQs with answers


1. Given Break even sales is 40,000 Profit earned is Rs 2,000 and fixed cost is Rs 8,000. Determine actual sales.

a) Rs 50,000
b) Rs 20,000
c) Rs 32,000
d) None of the above

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ANSWER: a) Rs 50,000



2. What will be the sales amount required to earn a profit of Rs 4,00,000, if fixed cost is Rs 80,000 , direct material is Rs 5 per unit, direct labor Rs 2 per unit, direct overhead 100% of direct labor and selling price is Rs 12 per unit.

a) Rs 19,20,000
b) Rs 3,20,000
c) Rs 12,90,000
d) None of the above

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ANSWER: a) Rs 19,20,000



3. Given fixed costs is Rs 1,00,000 selling price per unit is Rs 10 and variable cost per unit is Rs 6. If fixed cost increase by 10% , B.E.P will

a) Decrease by 2,500 units
b) No change
c) Increase by 2,500 units
d) None of the above.

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ANSWER: c) Increase by 2,500 units



4. Given fixed costs is Rs 1,00,000 selling price per unit is Rs 10 and variable cost per unit is Rs 6. If variable cost increase by 10% , B.E.P will

a) Decrease by 4,214 units
b) Increase by 4,214 units
c) Decrease by 4,412 units
d) Increase by 4,412 units

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ANSWER: d) Increase by 4,412 units



5. Given fixed costs is Rs 1,00,000 selling price per unit is Rs 10 and variable cost per unit is Rs 6. If variable cost increase by 10% and fixed cost decrease by 10%s , B.E.P will

a) Increase by 1,471 units
b) Decline by 1,471 units
c) Increase by 4,171 units
d) None of the above

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ANSWER: a) Increase by 1,471 units



6. What will be the impact on B.E.P if fixed cost is increased?

a) Decrease
b) No change
c) Increase
d) None of the above

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ANSWER: c) Increase



7. What will be the impact on B.E.P if variable costs are reduced?

a) Decrease
b) No change
c) Increase
d) None of the above

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ANSWER: a) Decrease



8. The profit at the level of existing sales is computed as

a) Sales - (Fixed cost + Variable cost)

b) Sales + (Fixed cost + Variable cost)

c) Sales - Variable cost

d) Sales - Fixed cost

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ANSWER: a) Sales - (Fixed cost + Variable cost)


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