Changes in Price, Output and Cost (AQA A-Level Business): Flashcards
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Practise the cards
10 cards from this deck
Purpose of breakeven analysis
Purpose of breakeven analysis
Shows how price/cost changes affect profitability
Price increase effect on sales revenue line
Price increase effect on sales revenue line
Pivots upward, becomes steeper
Price increase effect on breakeven output
Price increase effect on breakeven output
Lower output needed
Price decrease effect on breakeven output
Price decrease effect on breakeven output
Higher output needed
Fixed cost increase effect on total cost line
Fixed cost increase effect on total cost line
Parallel shift upward
Fixed cost increase effect on breakeven output
Fixed cost increase effect on breakeven output
Breakeven output increases
Variable cost increase effect on total cost line
Variable cost increase effect on total cost line
Pivots upward, becomes steeper
Variable cost increase effect on breakeven output
Variable cost increase effect on breakeven output
Higher output needed
Vertical distance on breakeven chart meaning
Vertical distance on breakeven chart meaning
Shows size of profit or loss
Breakeven analysis value for new businesses
Breakeven analysis value for new businesses
Estimates sales needed before making profit