Cost behaviour and break-even analysis

HideShow resource information

1. Break-even point (BEP):

  • Fixed cost / Contribution per unit (Contribution per unit = Sales revenue per unit − Variable costs per unit)
  • Fixed cost / Contribution per unit (Contribution per unit = Variable costs per unit + Sales revenue per unit)
  • Variable Cost / Contribution per unit (Contribution per unit = Variable costs per unit + Sales revenue per unit)
1 of 19

Other questions in this quiz

2. Fixed cost

  • It is a mixture of fixed and variable cost
  • Remain constant (fixed) when changes occur to the volume of activity
  • Vary according to the volume of activity

3. Margin of Safety in percentage

  • Planned Sales (units) + Break-even Point (units) x 100 / Planned Sales (units)
  • Planned Sales (units) – Break-even Point (units) x 100 / Planned Sales (units)
  • Planned Sales (units) + Break-even Point (units) / Unplanned debt x100 - 5
  • Planned Sales (units) / Break-even Point (units) x100

4. Min. price for sale if product no longer used anyway?

  • Re-sale value £12
  • Replacement cost £14
  • Historic cost £/Unit £10

5. Units to produce and sell to achieve a Target Profit

  • Variable Cost + Fixed cost / Contribution per unit
  • Fixed cost + Target Profit / Contribution per unit
  • Variable Cost + Target Profit / Contribution per unit

Comments

No comments have yet been made

Similar Accounting resources:

See all Accounting resources »See all Cost behaviour and break-even analysis resources »