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Year 11 Exam  >  Year 11 Tests  >  Business Studies for GCSE/IGCSE  >  Test: Costs, Break-even & Production Scale - Year 11 MCQ

Test: Costs, Break-even & Production Scale - Year 11 MCQ


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10 Questions MCQ Test Business Studies for GCSE/IGCSE - Test: Costs, Break-even & Production Scale

Test: Costs, Break-even & Production Scale for Year 11 2024 is part of Business Studies for GCSE/IGCSE preparation. The Test: Costs, Break-even & Production Scale questions and answers have been prepared according to the Year 11 exam syllabus.The Test: Costs, Break-even & Production Scale MCQs are made for Year 11 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Costs, Break-even & Production Scale below.
Solutions of Test: Costs, Break-even & Production Scale questions in English are available as part of our Business Studies for GCSE/IGCSE for Year 11 & Test: Costs, Break-even & Production Scale solutions in Hindi for Business Studies for GCSE/IGCSE course. Download more important topics, notes, lectures and mock test series for Year 11 Exam by signing up for free. Attempt Test: Costs, Break-even & Production Scale | 10 questions in 20 minutes | Mock test for Year 11 preparation | Free important questions MCQ to study Business Studies for GCSE/IGCSE for Year 11 Exam | Download free PDF with solutions
Test: Costs, Break-even & Production Scale - Question 1
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What type of costs increase or decrease directly with the level of production?

Detailed Solution for Test: Costs, Break-even & Production Scale - Question 1
Variable costs vary directly with the level of production. As production increases, variable costs also increase proportionately.
Test: Costs, Break-even & Production Scale - Question 2
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In economies of scale, which of the following statements is true?

Detailed Solution for Test: Costs, Break-even & Production Scale - Question 2
Economies of scale occur when average costs decrease as production levels increase due to factors such as bulk purchasing and specialization.
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Test: Costs, Break-even & Production Scale - Question 3
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Diseconomies of scale are likely to occur due to:

Detailed Solution for Test: Costs, Break-even & Production Scale - Question 3
Diseconomies of scale result from inefficiencies that arise when an organization becomes too large, leading to increased average costs.
Test: Costs, Break-even & Production Scale - Question 4
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A break-even chart shows the relationship between:
Detailed Solution for Test: Costs, Break-even & Production Scale - Question 4
A break-even chart illustrates the relationship between sales revenue and total costs, identifying the point at which total costs equal total revenue.
Test: Costs, Break-even & Production Scale - Question 5
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Break-even analysis helps businesses determine:
Detailed Solution for Test: Costs, Break-even & Production Scale - Question 5
Break-even analysis calculates the level of production or sales needed to cover all costs, indicating the minimum amount of activity required to avoid losses.
Test: Costs, Break-even & Production Scale - Question 6
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Which of the following is a limitation of break-even analysis?
Detailed Solution for Test: Costs, Break-even & Production Scale - Question 6
Break-even analysis assumes that fixed costs remain constant, which may not always be the case in practice, limiting its accuracy in dynamic business environments.
Test: Costs, Break-even & Production Scale - Question 7
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What is a characteristic of fixed costs in break-even calculations?
Detailed Solution for Test: Costs, Break-even & Production Scale - Question 7
Fixed costs remain constant in total regardless of the level of production or sales, affecting the break-even point calculations.
Test: Costs, Break-even & Production Scale - Question 8
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Economies of scale are primarily driven by:
Detailed Solution for Test: Costs, Break-even & Production Scale - Question 8
Economies of scale are achieved through increased specialization, which allows businesses to reduce average costs as production levels increase.
Test: Costs, Break-even & Production Scale - Question 9
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What factor is likely to contribute to diseconomies of scale?
Detailed Solution for Test: Costs, Break-even & Production Scale - Question 9
Diseconomies of scale often result from increased bureaucracy and inefficiencies as organizations grow larger, leading to higher average costs.
Test: Costs, Break-even & Production Scale - Question 10
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Break-even analysis is useful for determining:
Detailed Solution for Test: Costs, Break-even & Production Scale - Question 10
Break-even analysis helps businesses assess profitability at different sales volumes, aiding in decision-making related to pricing and sales strategies.
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