What is the primary focus of break-even analysis?

Determining maximum profit levels.

Analyzing the relationship between costs, volume, and profit.

Predicting future market conditions.

Which of the following is NOT an assumption of break-even analysis?

Variable costs remain constant per unit of output.

Fixed costs remain constant at all volumes of output.

Selling price per unit varies with changes in production.

There is only one product or a constant sales mix.

What does the break-even point represent in a business context?

The point at which maximum profit is achieved.

The point of no profit and no loss.

The point where variable costs exceed fixed costs.

The point where total sales exceed total costs.

How can the break-even point be calculated in units of sales volume?

Break-Even Point (in Units) = Total Fixed Costs / Selling Price per Unit

Break-Even Point (in Units) = Total Fixed Costs / Contribution Margin per Unit

Break-Even Point (in Units) = Total Sales Revenue / Variable Cost per Unit

Break-Even Point (in Units) = Total Fixed Costs / Total Variable Costs

What is the purpose of a cash break-even point in business analysis?

To determine the point of maximum profitability.

To identify the point where total revenue exceeds total cash cost.

To assess the liquidity position of the firm.

To calculate total fixed costs.

How can the composite break-even point be calculated in terms of sales value?

Composite Break-Even Point (in Sales Value) = Total Fixed Costs / Composite P/V Ratio

Composite Break-Even Point (in Sales Value) = Total Fixed Costs / Total Variable Costs

Composite Break-Even Point (in Sales Value) = Total Sales Revenue / Composite P/V Ratio

Composite Break-Even Point (in Sales Value) = Total Fixed Costs / Total Sales Revenue

What does the margin of safety represent in break-even analysis?

The point at which total revenue equals total cost.

The amount by which sales revenue can fall before a loss is incurred.

The level of maximum profitability.

The total fixed costs incurred by the business.

What does the angle of incidence indicate in break-even analysis?

The angle between the total cost line and the profit line.

The angle formed by the fixed cost line and the variable cost line.

The angle between the break-even point and the maximum profit point.

The angle of impact of sales on total costs.

In a profit-volume graph, what does the profit line represent?

Fixed costs at different levels of activity.

Profit and loss at different volumes of sales.

When does a curvilinear break-even analysis occur, and what does it typically show?

It occurs when the selling price and variable cost per unit are constant.

It occurs when a business reaches maximum profitability.

It occurs when there is more than one break-even point, showing that profit increases up to a certain point and then decreases.

It occurs when fixed costs vary with changes in the level of output.

Marginal Costing - 2 Free MCQ Practice Test with Solutions

	Cost Management 48 videos\|51 docs\|17 tests

	Cost Management 48 videos\|51 docs\|17 tests

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