Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

A business has given the following figures: total fixed costs are $12 500, the selling price per unit is $10, and the variable cost per unit is $6. It is expected that both fixed costs and unit selling prices will stay unchanged. Which percentage rise in variable costs would lead to a break-even output of 5000 units?

  • A20%
  • B25%
  • C33%
  • D42%

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI