Break-Even Analysis Flashcards

1️⃣ Familiarise yourself with the flashcards:

  • Look through all the flashcards to see what's on both sides.
  • Make sure you understand the information on each card. If something's unclear, click the link to the revision notes at the bottom of the page for more details.

2️⃣ Test yourself:

  • Look at the question or prompt on each card and try to remember the answer before flipping it over.
  • Check the answer and make a note of any cards you find challenging and need to go over more.

3️⃣ Consistently Review and Practice:

  • Use spaced repetition: spend more time on the cards you struggle with and go over them more often.
  • Regularly review all the flashcards to help you better understand and retain the information over time.

Note: We may include questions that have multiple correct answers. It's useful to remember specific examples to understand these concepts better.

PERSONALISED 1-TO-1 TUTORING

Need more help on this topic? Get 1-to-1 support

Get support with clear explanations, practice and feedback (Ages 5 to 16).

  • DBS-checked tutors
  • Flexible times
  • Parents can be updated
Book a free 10-min call See pricing

Want an ad-free experience? Subscribe to remove ads

What is the break-even point?

The level of sales where total revenue equals total costs, so profit is zero.

How do you calculate contribution per unit?

Selling price per unit minus variable cost per unit.

What is the formula for break-even output (units)?

Fixed costs divided by contribution per unit.

What are the steps to find break-even output?

1) Work out contribution per unit: price minus variable cost. 2) Divide fixed costs by that figure.

In break-even analysis, how do you calculate total revenue?

Selling price per unit times number of units sold.

How do you calculate total cost at a given output?

Fixed costs plus variable cost per unit times number of units.

What does a break-even chart show?

Total revenue and total cost against output, and where they cross is the break-even point.

How do you calculate break-even revenue (sales value)?

Break-even units times the selling price per unit.

If fixed costs rise, what happens to the break-even output?

It increases, because more sales are needed to cover higher fixed costs.

If the selling price per unit increases and costs stay the same, what happens to break-even output?

It decreases, because contribution per unit is higher.

Give one benefit of using break-even analysis.

It helps set sales targets and plan output to avoid losses.

Give one limitation of break-even analysis.

It assumes costs and prices stay the same and that all units made are sold.

Previous Topic
Back to Lesson
Next Topic