5.3 break-even analysis
Break-even: where a business produces neither a profit nor a loss ie total revenue = total costs. It is important for most businesses to know the quantity of products they must sell before they start earning a profit. \
The Break-even Point shows the quantity of products produced and sold where TR=TC, ie zero profit.
Unit contribution: Price - average variable cost.
Profit (or loss): Total revenue - total costs
Evaluation of break-even charts
Check list for producing a break-even chart
Question 1 - Little Jimmy's
Question 2 - Fred Fernackerpan
SL break-even question
HL break-even question
The Break-even Point shows the quantity of products produced and sold where TR=TC, ie zero profit.
Unit contribution: Price - average variable cost.
Profit (or loss): Total revenue - total costs
Evaluation of break-even charts
Check list for producing a break-even chart
Question 1 - Little Jimmy's
Question 2 - Fred Fernackerpan
SL break-even question
HL break-even question