Break-even

Question 1

What does it mean by Break even

Answer 1

Brosts and total revenue from sales are even

Question 2

What is the Break even formula

Answer 2

Fixed costs divided by contribution per unit

Question 3

What is the formula for Contribution

Answer 3

Contribution is the revenue a business receives from the sales of the product, minus the variable cost of the product
(revenue - variable costs)

Question 4

What happens if total revenue are greater than total costs

Answer 4

profit

Question 5

What happens if total revenue are less than total costs

Answer 5

loss

Question 6

What happens if total revenue is equal to total costs

Answer 6

broken even

Question 7

What happens to the break even point if a businesses cost rose

Answer 7

This will lead to the break-even point increasing, as more products will need to be sold, as more revenue is needed to cover the higher costs.

Question 8

What happens to the break even point if a businesses cost fell

Answer 8

This will lead to the break-even point decreasing as less products will need to be sold, as less revenue is need to cover the higher costs