break Even Is Useful When Flashcards
1
Q
1
A
By calculating their break-even point
2
Q
2
A
A business can identify the number of units they need to sell in order to cover their costs
3
Q
3
A
They can compare this with sales forecasts
4
Q
4
A
And identify wether they are likely to make a loss
5
Q
5
A
They can therefore take action to reduce their break-even point
6
Q
6
A
E.g. switching to a cheaper supplier or increasing the selling price
7
Q
7
A
In order to increase contribution p the unit
8
Q
8
A
And prevent loss from occurring
