What this practice covers
These questions are drawn from past CIE 0264 Business papers and filtered to costs, scale of production, break-even. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
Start practising practice questions →
What examiners see students get wrong here
These are the errors that cost marks on costs, scale of production, break-even, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Calling a cost fixed or variable by habit. Wages are variable when paid per unit and fixed when paid as a monthly salary.
- Dividing total variable cost by output and calling the answer average cost. That is variable cost per unit.
- Working out contribution as selling price minus total cost instead of minus variable cost.
- Dividing fixed costs by the selling price rather than by contribution per unit.
- Giving break-even output or margin of safety in dollars. Both are in units.
- Saying fixed costs fall as output rises. Fixed cost per unit falls; total fixed cost does not move.
- Reading the break-even point off the vertical axis, which gives revenue rather than output.
- Saying a rise in fixed costs changes contribution per unit. It changes break-even output only.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Costs, scale of production, break-even revision notes.