Finance — break-even
AQA GCSE Business Studies revision on Finance — break-even. Aligned to the AQA GCSE Business 8132 specification. This bank has 10 practice questions on this topic.
Sample questions (3 of 10)
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Question 1
What is the definition of the break-even point?
- A) The point where total revenue equals total costs
- B) The point where profit is maximised
- C) The point where fixed costs are zero
- D) The point where variable costs equal revenue
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Answer: The point where total revenue equals total costs
At the break-even point, the total revenue generated from sales exactly covers all fixed and variable costs. Any sales made beyond this point result in a profit for the business.
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Question 2
A business has fixed costs of 2000 pounds, a selling price of 20 pounds per unit, and variable costs of 10 pounds per unit. What is the break-even point in units?
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Answer: 200
The contribution per unit is the selling price minus the variable cost (20 - 10 = 10). Dividing the total fixed costs of 2000 by the contribution of 10 gives 200 units required to break even.
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Question 3
Which of the following is an example of a fixed cost?
- A) Raw materials
- B) Annual insurance premium
- C) Sales commissions
- D) Packaging costs
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Answer: Annual insurance premium
Insurance premiums are set costs that do not change based on output levels. In contrast, raw materials and packaging are variable costs because they increase as more goods are produced.
Want to test yourself on the remaining cards for this topic?
7 more questions on Finance — break-even — plus mistakes tracking and spaced repetition across the whole Business Studies spec.