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2.2.3 Break Even Flashcards | StudBud
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2.2.3 Break Even
2.2.3 Break Even
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Break Even
Flashcards
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Questions
10
Answers
1
Your business has a breakeven of 650 units and sells 1000 units what is your margin of safety
650 units
350 units
450 units
1000 units
2
Breakeven point is the point where
A start up business begins to trade
a business goes into liquidation
sales revenue and total costs are equal
The company neither makes a profit or a loss
3
Fixed costs =
£900
, Sell price =
£15.0
0 p/u, Variable costs =
£3.00
p/u Calculate breakeven
£60
75 units
300 units
£75
4
A
risk
of not using breakeven analysis is
Margin of safety is unknown
Costs are unknown
The owner can make adjustments to try to make profit sooner
Margin of safety is known
5
On a breakeven chart
profit
is shown .......
To the left of the breakeven point
On the y axis
on the x axis
To the right of the breakeven point
6
If a company
DECREASES
their fixed
COST
S
They will make more profit
Their breakeven point will be lower
They will have to sell more units to break even
They will have to look for new products to sell
7
Total costs are .....
Fixed costs
start up costs
variable costs
Fixed costs plus variable costs
8
An
INCREASE
in VARIABLE
COSTS
will mean
profit levels will rise
profit levels will fall
A company must sell more units to break even
An increase in staff
9
Break even is expressed in terms of what?
amount in £
Number of units
baked beans
amount in €
10
One
benefit
to using a breakeven analysis is
The owner can make adjustments to try to make profit sooner
Costs are unknown
Margin of safety is known
margin of safety is unknown
