3.3 Break-even analysis

Question 1

Break-even

Answer 1

Break even = Fixed costs/(Selling price - variable cost per unit)

Question 2

how to draw total fixed costs (TFC)

Answer 2

Drawn as a horizontal line.

Question 3

Break-even point (BEP)

Answer 3

Total sales revenue= Costs of production(TC)

Question 4

how to draw break-even quantity (BEQ)

Answer 4

Labelled on the x-axis indicating the sales volume needed for the business to break-even.