Break-Even Analysis

Question 1

Amount of money that is left from a company’s revenue after is pays for it’s expenses in doing business

Answer 1

Profit

Question 2

Profit is also known as…?

Answer 2

Net Income or Net Earnings

Question 3

Formula for PROFIT

Answer 3

Profit = Revenue - Expenses

where;
Revenue is also known as Income

Question 4

Occurs when the cost and the expense exceeds the selling price (cost price is greater than selling price)

Answer 4

Loss

Question 5

Formula for Loss

Answer 5

Loss = Revenue - Expenses

Question 6

The point where the seller has covered all expenses and costs of production but has not made any profit or suffered any loss. it is merely covering its total cost

Answer 6

Break-Even

Question 7

Formula for Break-Even

Answer 7

Break-Even Point (in units) = Fixed Cost/Contribution Margin

where;
Contribution Margin = Unit Price - Variable Cost

Break-Even Point (in pesos) = (Unit Price) (BEP in units)

Question 8

Break-Even in Summary

Answer 8

Loss = Revenue < Total Cost

Profit = Revenue > Total Cost

where;
Break-Even is…
Revenue = Total Cost