BTEC Business - Unit 3
Breakeven questions and
answers
breakeven point formula - answer fixed costs/(selling price-variable costs)
breakeven - answer a business makes no profit or loss
breakeven point - answer the level of sales at which profit is zero
sales revenue = total cost
breakeven analysis - answer the process of determining the number of
units a firm must sell to cover all costs
contribution - answer = selling price - variable costs
It is the money leftover from the sale of a product that goes toward paying
off fixed costs and later making a profit.
margin of safety - answer The difference between actual sales and break-
even sales. It is the area beyond the breakeven point, it informs the
business of how many units sales can fall by before it starts to make a
loss.
= actual sales - break-even sales
benefits of breakeven analysis - answer find out the number of units to
sell in order to cover costs, can be used to set sales target, find out the
amount of profit at different level of sales, know the margin of safety,
know if a business is viable
Breakeven questions and
answers
breakeven point formula - answer fixed costs/(selling price-variable costs)
breakeven - answer a business makes no profit or loss
breakeven point - answer the level of sales at which profit is zero
sales revenue = total cost
breakeven analysis - answer the process of determining the number of
units a firm must sell to cover all costs
contribution - answer = selling price - variable costs
It is the money leftover from the sale of a product that goes toward paying
off fixed costs and later making a profit.
margin of safety - answer The difference between actual sales and break-
even sales. It is the area beyond the breakeven point, it informs the
business of how many units sales can fall by before it starts to make a
loss.
= actual sales - break-even sales
benefits of breakeven analysis - answer find out the number of units to
sell in order to cover costs, can be used to set sales target, find out the
amount of profit at different level of sales, know the margin of safety,
know if a business is viable
