Btec Business Review Test Final
Questions & Answers 2024/2025
Breakeven - ANSWERSWhen revenue and expenditure are the same. there is no profit or loss
variable costs - ANSWERSraw materials, change as output increases
margin of safety - ANSWERSis the amount by which sales would have to fall before the break-even point
is reached
total costs - ANSWERSfixed costs plus variable costs
break-even point - ANSWERSwhen a business has made enough money through product sales to cover
the cost of making the product
selling price - ANSWERStotal revenue divided by maximum number of products
increasing the price - ANSWERSbreak even point falls
reduce the price - ANSWERSbreak even point becomes higher
break even analysis - ANSWERSplanning tool that helps businesses to make the right decisions and
increase their chances of success
benefits of break even analysis - ANSWERSbusiness knows the fixed and variable costs linked to a
product.
the business can set the best price for a product.
it allows the business to set a margin of safety.
, risks of ignoring breakeven analysis - ANSWERSthe business does not know the costs of production and
running costs.
the business does not know how many items it must sell to make a profit.
the business may make a loss without realising or knowing why.
break even point will change - ANSWERSif costs change or if the selling price changes
if costs fall - ANSWERSthe breakeven point is lower so the business makes a profit
the lower the breakeven point - ANSWERSthe fewer the sales needed to make a profit
total sales revenue formula - ANSWERSnumber of sales times price per unit
to make a profit - ANSWERSrevenue must be higher than expenditure
profit formula - ANSWERSrevenue take away expenditure
netflow/outflow formula - ANSWERSinflows take away outflows
net inflow - ANSWERSincreases money already in the bank
net outflow - ANSWERSreduces the money already in the bank
improving inflows - ANSWERSchase up late payments.
avoid giving credit to unknown customers.
give discounts for early payment.
improving outflows - ANSWERSdelay some payments.
reduce stock levels.
Questions & Answers 2024/2025
Breakeven - ANSWERSWhen revenue and expenditure are the same. there is no profit or loss
variable costs - ANSWERSraw materials, change as output increases
margin of safety - ANSWERSis the amount by which sales would have to fall before the break-even point
is reached
total costs - ANSWERSfixed costs plus variable costs
break-even point - ANSWERSwhen a business has made enough money through product sales to cover
the cost of making the product
selling price - ANSWERStotal revenue divided by maximum number of products
increasing the price - ANSWERSbreak even point falls
reduce the price - ANSWERSbreak even point becomes higher
break even analysis - ANSWERSplanning tool that helps businesses to make the right decisions and
increase their chances of success
benefits of break even analysis - ANSWERSbusiness knows the fixed and variable costs linked to a
product.
the business can set the best price for a product.
it allows the business to set a margin of safety.
, risks of ignoring breakeven analysis - ANSWERSthe business does not know the costs of production and
running costs.
the business does not know how many items it must sell to make a profit.
the business may make a loss without realising or knowing why.
break even point will change - ANSWERSif costs change or if the selling price changes
if costs fall - ANSWERSthe breakeven point is lower so the business makes a profit
the lower the breakeven point - ANSWERSthe fewer the sales needed to make a profit
total sales revenue formula - ANSWERSnumber of sales times price per unit
to make a profit - ANSWERSrevenue must be higher than expenditure
profit formula - ANSWERSrevenue take away expenditure
netflow/outflow formula - ANSWERSinflows take away outflows
net inflow - ANSWERSincreases money already in the bank
net outflow - ANSWERSreduces the money already in the bank
improving inflows - ANSWERSchase up late payments.
avoid giving credit to unknown customers.
give discounts for early payment.
improving outflows - ANSWERSdelay some payments.
reduce stock levels.
