Lesson 5.5.1

5.5.1 Break-even analysis Quiz: OCR Business, Unit 5

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 5.5.1, Break-even analysis: 20 multiple choice questions for the OCR Business (H431), Unit 5: Accounting and finance, written with Revision Ninja.

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The 20 questions

  1. What is the formula used to calculate contribution per unit?

    • Price minus total
    • Price minus variable
    • Fixed over price
    • Revenue minus fixed

  2. What occurs at the exact break-even point for a business?

    • Zero profit
    • Maximum contribution
    • Zero variable cost
    • Maximum total profit

  3. A firm sells product X for £20 with variable costs of £12 per unit. Calculate contribution per unit.

    • £1.60
    • £240
    • £8
    • £32

  4. Fixed costs are £10,000 and contribution per unit is £5. What is the break-even output level?

    • 50,000 units
    • 500 units
    • 2,000 units
    • 2,500 units

  5. What does the term margin of safety measure in break-even analysis?

    • Total profit earned
    • Maximum capacity limit
    • Remaining fixed costs
    • Output above break-even

  6. Current sales output is 5,000 units and break-even output is 3,800 units. Calculate margin of safety.

    • 8,800 units
    • 1.31 units
    • 3,800 units
    • 1,200 units

  7. How is a stepped fixed cost best defined in business accounting?

    • Fixed in bands
    • Fluctuating randomly
    • Variable per unit
    • Decreasing with output

  8. Which action directly lowers a business's break-even point?

    • Decreasing output volume
    • Lowering selling price
    • Lowering fixed costs
    • Increasing variable costs

  9. Fixed costs are £20,000, target profit is £10,000, and contribution is £10. What target output is needed?

    • 3,000 units
    • 2,000 units
    • 30,000 units
    • 1,000 units

  10. If a firm increases its selling price while all costs remain unchanged, what happens to margin of safety?

    • It decreases
    • It remains unchanged
    • It hits zero
    • It increases

  11. Which assumption is a major limitation of standard break-even analysis?

    • Fluctuating fixed costs
    • Constant selling price
    • Multiple product lines
    • Non-linear revenue

  12. On a standard break-even chart, where is the break-even point shown?

    • Fixed crosses cost
    • Revenue crosses cost
    • Revenue crosses x-axis
    • Variable crosses revenue

  13. Selling price is £15, variable cost per unit is £5, and output is 1,000 units. Calculate total contribution.

    • £5,000
    • £15,000
    • £20,000
    • £10,000

  14. For a special order to be financially viable, what must the order price cover?

    • Total fixed costs
    • Full overhead costs
    • Normal profit margin
    • Variable costs

  15. On a break-even chart, what does the vertical distance between total costs and fixed costs represent?

    • Net profit
    • Contribution per unit
    • Total revenue
    • Total variable costs

  16. If a business experiences an increase in raw material costs per unit, how is break-even output affected?

    • It remains constant
    • It hits zero
    • It increases
    • It decreases

  17. What formula correctly expresses total costs for a business?

    • Fixed plus variable
    • Variable minus fixed
    • Revenue minus profit
    • Contribution plus fixed

  18. Why might a business reject a special order despite it generating a positive contribution?

    • High safety margin
    • Lower fixed costs
    • High variable costs
    • Lack of capacity

  19. A business faces a 10% increase in factory rent. What is the immediate effect on break-even point?

    • It reaches zero
    • It decreases
    • It increases
    • It remains unchanged

  20. Which external stakeholder group primarily uses break-even analysis to evaluate lending risk?

    • Tax authorities
    • Customers
    • Banks
    • Employees

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