Break Evean

Question 1

What is the definition of break even

Answer 1

When the business doesn’t make profit it doesn’t make any loss

Question 2

What is the formula for break even

Answer 2

Fixed costs divided by selling price - variable cost

Question 3

Formula for the contribution

Answer 3

Selling price - variable cost

Question 4

What must u do if the breaker even is a decimal

Answer 4

Round up !!!

Question 5

Sales revenue at break even formula

Answer 5

Break even quantity X selling price

Question 6

To read the sales revenue at break even where must u read from

Answer 6

The y axis , vertical

Question 7

Calculate the level of profit using a break even graph

Answer 7

Calculate the gap between the total revenue line and the total cost line .
Profit = total revenue - total cost

Question 8

What line is always horizontal on the break even graph

Answer 8

Fixed costs

Question 9

What is the margin of safety

Answer 9

The difference between the actual sales and the number of sales made at break even

Question 10

Formula for margin of safety

Answer 10

Actual sales - break even output

Question 11

What is the purpose of completing a break even analysis

Answer 11

So a business can plan how much to sell to break even

To see how much profit or loss a business will make in a given Leavel of output

To determine how a change in costs will affect the break even point

To determine how a chance in price will affect the break even point

Question 12

What are the advantages of completing a break even analysis

Answer 12

To help a business spot problems and help to solve the problems

No specialist training is required to construct and anaylis then

Question 13

What are the disadvantages

Answer 13

It assumes all products are sold at the same price

The chat is only a forecast

It is an estimation but actual data

Question 14

What happened to break even point if the fixes costs increase

Answer 14

The break even pony increases as the total cost are higher and the business has to sell more

Question 15

What happened to the break even point if gives costs decrease

Answer 15

The break even point decreases as the total cost are lower and the bussiness has to sell less

Question 16

What happened to the break even point if variable costs increase

Answer 16

The break even point increases as the total costs are higher and the business has to sell more

Question 17

I hat happened to the break even point if variable costs decrease

Answer 17

The break even point decreases as the total costs are lower and the business has to sell less

Question 18

What happened to the the break even point if the selling prices increases

Answer 18

The break even point will decrease because increasing selling prices would mean you make more money per products sold and therefore more total revenue . This means that the business would have to sell less to break even

Question 19

What happened to the break even point if the selling price decreases

Answer 19

The break even point will increase because the larger quantity of products would need to be sold as the money made per products sold would be smaller . This means that the business would have to sell more to break even