Btec Business Revision
Comprehensive Questions
(Frequently Tested) with
Verified Answers Graded A+
Breakeven - Answer: When revenue and expenditure are the same. there is no profit or loss
variable costs - Answer: raw materials, change as output increases
margin of safety - Answer: is the amount by which sales would have to fall before the break-
even point is reached
total costs - Answer: fixed costs plus variable costs
break-even point - Answer: when a business has made enough money through product sales to
cover the cost of making the product
selling price - Answer: total revenue divided by maximum number of products
increasing the price - Answer: break even point falls
reduce the price - Answer: break even point becomes higher
, break even analysis - Answer: planning tool that helps businesses to make the right decisions
and increase their chances of success
benefits of break even analysis - Answer: business 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 - Answer: the 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 - Answer: if costs change or if the selling price changes
if costs fall - Answer: the breakeven point is lower so the business makes a profit
the lower the breakeven point - Answer: the fewer the sales needed to make a profit
total sales revenue formula - Answer: number of sales times price per unit
to make a profit - Answer: revenue must be higher than expenditure
profit formula - Answer: revenue take away expenditure
netflow/outflow formula - Answer: inflows take away outflows
Comprehensive Questions
(Frequently Tested) with
Verified Answers Graded A+
Breakeven - Answer: When revenue and expenditure are the same. there is no profit or loss
variable costs - Answer: raw materials, change as output increases
margin of safety - Answer: is the amount by which sales would have to fall before the break-
even point is reached
total costs - Answer: fixed costs plus variable costs
break-even point - Answer: when a business has made enough money through product sales to
cover the cost of making the product
selling price - Answer: total revenue divided by maximum number of products
increasing the price - Answer: break even point falls
reduce the price - Answer: break even point becomes higher
, break even analysis - Answer: planning tool that helps businesses to make the right decisions
and increase their chances of success
benefits of break even analysis - Answer: business 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 - Answer: the 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 - Answer: if costs change or if the selling price changes
if costs fall - Answer: the breakeven point is lower so the business makes a profit
the lower the breakeven point - Answer: the fewer the sales needed to make a profit
total sales revenue formula - Answer: number of sales times price per unit
to make a profit - Answer: revenue must be higher than expenditure
profit formula - Answer: revenue take away expenditure
netflow/outflow formula - Answer: inflows take away outflows
