Break Even Flashcards
1
Q
What line on a break even graph is flat?
A
Fixed costs
2
Q
What line on a break even graph starts from £0?
A
Sales revenue
3
Q
Which line on a break even graph starts on the fixed costs line?
A
Total costs
4
Q
What is it called when total revenue= total costs
A
Break even point
5
Q
What is margin of safety?
A
The amount by which the quantity sold is over the break even quantity
6
Q
What are limitations of break even analysis?
A
- doesn’t include competitors
- doesn’t account for discounts
- only a prediction
- only one product
