10 Questions
The volume of production is the only factor that influences fixed costs.
False
The break-even point can be calculated using the formula BEP = TFC / (P + V).
False
The unit contribution margin represents the total profit per unit sold.
False
The breakeven point is the point where total revenue is less than total cost.
False
Break-even analysis is a type of demand-side analysis that considers market demand and sales projections.
False
If the variable cost per unit is $10 and the expected unit sales is 1000, then the total variable cost is $10,000.
True
The break-even point calculation assumes that the selling price per unit increases with an increase in output.
False
A company incurs a fixed cost of $5,000 and a variable cost of $20 per unit, and the unit selling price is $100, then the unit contribution margin is $80.
True
The margin of safety is the difference between the breakeven point and the actual sales level.
True
If the total revenue is $10,000 and the total cost is $8,000, then the profit is $2,000.
True
Compute the break-even point using total revenue, total costs, fixed costs, and variable costs. Calculate the unit sales at the break-even point.
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