Answer the following questions about break- even analysis:
1. Break- even is defined as the point at which ______________ equals ______________.
2. The contribution margin is equal to ______________ minus ______________.
3. The Local Town Concert Band has fixed costs of $ 500 per concert and variable costs of $ 2.00 per per-son who attends the concert. If they raise their ticket price from $ 2.25 to $ 2.50, their breakeven level:
a. Increases
b. Decreases
c. Stays the same
4. The marginal contribution or contribution margin is the difference between ______________ and ______________.
5. The Campaign for Better Politicians expects to have $ 5,000 in fixed costs. If their fixed costs do not change but the amount of money each marcher raises through pledges (price/ unit) declines from $ 75 to $ 60 and their variable cost/ unit increases from $ 40 to $ 50, their break- even quantity will:
a. Increase
b. Decrease
c. Stay the same
6. If all other factors remain unchanged, an increase in the variable cost per unit of service will:
a. Reduce the break-even volume of service.
b. Reduce the contribution margin per unit of service.
c. Increase total fixed costs.
7. The difference between marginal revenue and marginal cost is called the ______________.
8. If an organization sells ten fewer tickets to its annual gala than are needed to break even, the gala will produce:
a. A loss or deficit
b. Break-even results
c. A profit or surplus