To answer all the 'online assessment' questions on this next topic on the course:
Learners should for a PASS (C):
- Be able to define break-even - the point that a business has made enough money through product sales to cover the costs of making the product (no profit and no loss)
- Be able to interpret (point out or identify) from a break-even chart: the
- break even point
- profit
- loss
- variable costs
- fixed costs
- total revenue
- total costs
- margin of safety
- Be able to calculate the break-even (formula will be given in the given assessment) using method 1, 2 or both
Method 1 - Contribution Method For a PASS
Break-even point = total fixed costs
(output) selling price per unit - variable cost per unit
Method 2 - The Break Even Point - (BEP) Graph Method or Seven Steps to Break Even Heaven click here
Learners should for a MERIT (B)
- Be able to analyse and explain the value and importance of break-even analysis to businesses when planning for success
- Analyse and explain the associated risks to a business of not completing a break-even analysis
- Present the given information graphically on a break-even chart
Learners should for a DISTINCTION (A)
- Analyse the effect on the break-even point if sales or (fixed and variable) costs change, and explain the impact of these changes on the business.
NEXT STEPS in our next lesson - click here
Homework 3 Wk 3
That's all you need to know for topic three now test yourself here
Good luck and enjoy
Mr T
PS if you haven't bought a core textbook the link here might be useful or alternatively you could get a second hand one or dare I say take a trip to use a free one in the library as they are ordering some for in there!
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