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Break even
Total costs are .....
An INCREASE in VARIABLE COSTS will mean
Break even
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Break Even (GCSE Business)
Flashcards
12 cards
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Practice quiz
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Questions
12
Answers
1
An
INCREASE
in VARIABLE
COSTS
will mean
profit levels will rise
profit levels will fall
An increase in staff
A company must sell more units to break even
2
Total costs are .....
Fixed costs plus variable costs
Fixed costs
variable costs
start up costs
3
Contribution is...
The amount that revenue contributes towards profit
The amount per item sold contributed to covering costs
The quantity at which the product breaks even
The amount of sales needed to cover costs
4
Fixed costs =
£1000
, Sell price =
£15.0
0 p/u, Variable costs =
£3.50
p/u Calculate breakeven
£87
87 units
£0
87
5
If a company
DECREASES
their fixed
COST
S
They will have to look for new products to sell
They will make more profit
They will have to sell more units to break even
Their breakeven point will be lower
6
Breakeven point is the point where
a business goes into liquidation
The company neither makes a profit or a loss
A start up business begins to trade
sales revenue and total costs are equal
7
On a breakeven chart
profit
is shown .......
To the left of the breakeven point
on the x axis
On the y axis
To the right of the breakeven point
8
A DISADVANTAGE of using break even is..
You might calculate costs/revenues incorrectly
B/E charts are hard to draw
It assumes that all stock is sold
It shows both variable and fixed costs
9
Break even is express in terms of what?
baked beans
Number of units
amount in £
amount in €
10
Your business has a breakeven of 650 units and sells 1000 units what is your margin of safety
650
1000-650=350 baked beans
1000
1000-650=350 units
11
One
benefit
to using a breakeven analysis is
Costs are unknown
Margin of safety is known
The owner can make adjustments to try to make profit sooner
margin of safety is unknown
12
A
risk
of not using breakeven analysis is
Margin of safety is unknown
The owner can make adjustments to try to make profit sooner
Costs are unknown
Margin of safety is known
