## Tuesday 17 September 2019

### Learning Outcome B Planning tools for success

Lesson 4 Topic 3 (B.1) Understand the planning tools businesses use to predict when they will start making a profit

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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