Break Even Flashcards
1
Q
What do you need to calculate break even ?
A
You need the:
Fixed costs
Variable costs
Selling price
2
Q
What is break even ?
A
Break even point is the level of output where the firm will just cover its cost . If it sells anymore it will make a profit. Basically where a business stops making a loss and starts making a profit
3
Q
How do you calculate break even?
A
Selling price - variable cost
4
Q
What is the bottom half of the break even calculation known as? (Selling price - variable cost)
A
This is known as the contribution to fixed costs and profits
