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Fixed/Variable Costs Worksheet - Break-Even Analysis [Virtual Learning Arcade]

A brief interactive worksheet looking at the effect on the break-even level of output of an increase in fixed costs and variable costs together.

Break Even Analysis: A Change in Variable and Fixed Costs

The aim of these question is to interpret the consequences of an increase fixed costs and a decrease in variable costs on the break-even point.

If a firm's fixed costs increased (ship maintenance) and its variable costs decreased (sensitivity to fuel), what would happen to the margin of safety? (select one answer)

(a) unmarked question increase
(b) unmarked question decrease
(c) unmarked question unknown
(b) unmarked question remain the same

The company that maintains the ship has offered to replace the current engine with a more recent model (Ship Maintenance (£ year) increases by £12,000). They propose that this would make the ship more efficient and therefore, less dependent on fuel (Sensitivity to Fuel Price (%) decreases to 62%)

Comment on the impact on the firm; its profits, break-even mileage and the new margin of safety.; Try This

(Type your answer to the previous question in the box below, then click on explain)


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Submitted by bized on Wed, 14/03/2001 - 13:00