test

• effects of break even


  read

  
• What is sales volume?

  Number of units sold
• If a company has sales revenue of £50,000 and a selling price of £2.50, what is the sales volume?

  20,000 units
• How is sales revenue calculated?

  Selling price multiplied by quantity sold
• What is the sales revenue if 20,000 units are sold at £2.50 each?

  £50,000
• What is the formula for calculating revenue?

  • Revenue = Selling price x quantity sold
• If a business sells 20,000 units at £15 each, what is the revenue?

  £300,000
• How does revenue behave on a graph?

  Starts at 0 and slopes upwards
• What are fixed costs?

  Costs that stay the same regardless of output
• If a business borrows £30,000 at 7.5% interest, what is the annual interest payment?

  £2,250
• What are variable costs?

  Costs that change with production levels
• If average variable costs are £6 and 100 units are produced, what are the total variable costs?

  £600
• What are total costs?

  Fixed costs plus total variable costs
• If fixed costs are £40,500 and total variable costs are £600, what are total costs?

  £41,100
• What information is provided in the test yourself section?

  Selling price, quantity sold, fixed costs
• If selling price is £15, quantity sold is 100,000, and fixed costs are £40,500, what is the sales revenue?

  £1,500,000
• What are total costs if average costs per unit are £6 and 100,000 units are sold?

  £600,000
• What have you learned in this topic?

  • Calculation of sales volume and revenue
  • Calculation of fixed and variable costs