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Break even
Break even
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StudBud Administration
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Topic B1 Break Even
Flashcards
10 cards
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Practice quiz
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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
1000-650=350 baked beans
1000-650=350 units
650
1000
2
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
3
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
4
Breakeven point is the point where
A start up business begins to trade
The company neither makes a profit or a loss
sales revenue and total costs are equal
a business goes into liquidation
5
Fixed costs =
£1000
, Sell price =
£15.0
0 p/u, Variable costs =
£3.50
p/u Calculate breakeven
£0
£87
87 units
87
6
Total costs are .....
variable costs
Fixed costs plus variable costs
Fixed costs
start up costs
7
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
8
On a breakeven chart
profit
is shown .......
To the right of the breakeven point
To the left of the breakeven point
on the x axis
On the y axis
9
Break even is express in terms of what?
amount in £
baked beans
amount in €
Number of units
10
If a company
DECREASES
their fixed
COST
S
Their breakeven point will be lower
They will make more profit
They will have to look for new products to sell
They will have to sell more units to break even
