BEP/margin of safety

Question 1

Break-even

Answer 1

a point where a business can cover its total costs – the business makes neither a profit nor a loss.

Question 2

Break-even level of output

Answer 2

Fixed costs/price – variable cost per unit. The quantity of product a business needs to produce and sell to break even.

Question 3

Margin of safety

Answer 3

The difference in the level of output (or sales) and the break-even point

Question 4

BEP formula

Answer 4

FIXED COST / SELLING PRICE - VARIABLE COST
PER UNIT

Question 5

margin of safety

Answer 5

ACTUAL SALES - BREAK-EVEN POINT