Finance - Break-Even Flashcards
1
Q
What is the break-even point ?
A
A businesses break even is when they don’t make a profit or a loss
2
Q
What is a fixed cost ?
A
These are expenses that a business incurs which do not change with output
3
Q
What is a variable cost ?
A
These are expenses that a business incurs which do change with the output
4
Q
What is total cost ?
A
the fixed costs and variable costs added together
an amount of money the business spends to makes and provide goods/ services
5
Q
What is the total cost formula ?
A
Fixed cost + Variable costs
6
Q
What is the contribution ?
A
contribution = selling price - variable cost
7
Q
What is the break-even formula ?
A
break-even = fixed cost
contribution
8
Q
Draw the break-even diagram
A
Total revenue
Total costs
Fixed costs
