break-even charts

Question 1

why can a break-even chart be drawn to show what?

Answer 1

to show how many products an enterprise needs to sell in order to break-even

Question 2

what information does an enterprise need before drawing a break-even chart? (4)

Answer 2

1. fixed costs
2. variable costs
3. total revenue (sales)
4. selling price per unit

Question 3

how do you draw a break-even chart?

Answer 3

1. Draw the fixed costs line.
2. Draw the total costs line (varlable +
   fixed costs).
3. Draw the total revenue line.
4. Mark on the break-even point - where total costs and total revenue lines cross

Question 4

what does the vertical axis on the chart show?

Answer 4

costs and revenues (sales) in £

Question 5

what does the horizontal axis show on the chart?

Answer 5

the quantity of boxes (output/sales)