Break-even charts (Edexcel GCSE Business): Flashcards
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Practise the cards
13 cards from this deck
Break-even point definition
Break-even point definition
When income from sales exactly matches all costs
Profit/loss at break-even point
Profit/loss at break-even point
No profit, no loss
Where total revenue line starts
Where total revenue line starts
Zero (no sales = no revenue)
Fixed costs line on chart
Fixed costs line on chart
Horizontal (constant regardless of production)
3 examples of fixed costs
3 examples of fixed costs
Rent, insurance, salaries
Break-even point location on chart
Break-even point location on chart
Where total revenue crosses total costs
Area above break-even point
Area above break-even point
Profits (revenue exceeds costs)
Area below break-even point
Area below break-even point
Losses (costs exceed revenue)
Margin of safety
Margin of safety
Gap between current production & break-even point (larger = safer)
Revenue formula
Revenue formula
Price × Quantity
Total costs formula
Total costs formula
Total fixed costs + Total variable costs
Break-even point formula (units)
Break-even point formula (units)
Fixed costs ÷ (Price per unit - Variable cost per unit)
Contribution per unit
Contribution per unit
Selling price - Variable cost per unit