Finance
Edexcel GCSE Business Studies revision on Finance. Aligned to the Pearson Edexcel GCSE Business 1BS0 specification. This bank has 10 practice questions on this topic.
Sample questions (3 of 10)
-
Question 1
A business has revenue of £120,000, total costs of £75,000. What is its profit?
Show answer
Answer: 45000
Profit = 120,000 − 75,000 = £45,000. The simplest finance formula on the spec. Watch out for the question asking 'profit margin' instead (profit ÷ revenue × 100 = 37.5%).
-
Question 2
Break-even is the level of output where...
- A) Variable costs are zero
- B) Revenue exactly equals total costs
- C) Profit is at its highest
- D) Fixed costs are paid off
Show answer
Answer: Revenue exactly equals total costs
Break-even output = fixed costs ÷ (price per unit − variable cost per unit). Above break-even = profit. Below = loss. Useful for working out 'how many do I need to sell to cover my costs?' before pricing decisions.
-
Question 3
A company's fixed costs are £10,000/month. Each unit sells for £20 and costs £5 to make. How many units does it need to sell to break even?
Show answer
Answer: 667
Contribution per unit = price − variable cost = £20 − £5 = £15. Break-even units = fixed costs ÷ contribution = 10,000 ÷ 15 = 666.67. Round UP to 667 because you can't sell a fraction of a unit AND need to fully cover the costs.
Want to test yourself on the remaining cards for this topic?
7 more questions on Finance — plus mistakes tracking and spaced repetition across the whole Business Studies spec.