interpretating a break-even chart Flashcards
what does a break-even chart provide?
lots of financial information about a product
what does a break-even chart show to make an enterprise a profit?
the number of units required
what can a break-even chart be used to identify?
the margin of safety
how does an enterprise know if it makes a profit?
When the total revenue line is higher than total costs line
how does an enterprise know if it makes a loss?
When the total costs line is highrt than total revenue line
how is loss shown on the chart?
the space between costs and revenue below the break-even point
how is profit shown on the chart?
by the space between costs and revenue above the break-even point
what is the margin of safety?
the total number of sales chat can be lost
before the enterprise loses money.
how do you calculate the margin of safety?
sales - break-even point
by analysing a break-even chart, what can we calculate the level of output?
which total costs equals total revenue (the break-even point)
by analysing a break-even chart, why can we calculate the total fixed costs?
will be the same at any level of output or sales
by analysing a break-even chart, why can we calculate the total variable costs?
as you can calculate it at any level of output or sales (total costs minus fixed costs)
by analysing a break-even chart, why can we calculate the total costs?
as it can be calculated at any level of output or sales (fixed costs plus variable costs)
by analysing a break-even chart, what can we calculate?
the margin of safety
by analysing a break-even chart, what can be made at an level of output or sales (total costs minus total revenue)
The level of profit or loss
