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BTEC - Unit 3 Finance: Break even Flashcards | StudBud
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BTEC - Unit 3 Finance: Break even
BTEC - Unit 3 Finance: Break even
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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
650
1000
1000-650=350 units
1000-650=350 baked beans
2
A
risk
of not using breakeven analysis is
Margin of safety is unknown
Costs are unknown
Margin of safety is known
The owner can make adjustments to try to make profit sooner
3
One
benefit
to using a breakeven analysis is
Margin of safety is known
margin of safety is unknown
The owner can make adjustments to try to make profit sooner
Costs are unknown
4
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
5
Breakeven point is the point where
a business goes into liquidation
sales revenue and total costs are equal
The company neither makes a profit or a loss
A start up business begins to trade
6
If a company
DECREASES
their fixed
COST
S
They will make more profit
They will have to sell more units to break even
They will have to look for new products to sell
Their breakeven point will be lower
7
Total costs are .....
Fixed costs
Fixed costs plus variable costs
start up costs
variable costs
8
On a breakeven chart
profit
is shown .......
On the y axis
To the left of the breakeven point
To the right of the breakeven point
on the x axis
9
Break even is expressed in terms of what?
baked beans
Number of units
amount in £
amount in €
10
Fixed costs =
£1000
, Sell price =
£15.0
0 p/u, Variable costs =
£3.50
p/u Calculate breakeven
£87
£0
87
87 units
