Break even charts Flashcards
Where is the break even point on a graph?
The point at which total costs and revenue meet.
What is break even?
The level of output at which a business’s revenue covers its total cost.
(The point at which the business is neither making a profit or a loss)
How does the break even point on a graph determine the profit or loss?
Total revenue higher than break even = Profit
Total revenue lower than break even = Loss
How does fixed line look on a graph?
A horizontal line
What is the margin of safety?
The amount of output between the actual level of output where profit is being made and the break even level of output.
How do you calculate break ven point in units?
Fixed cost / (Sales price - Variable costs)
How do you calculate break even point in revenue/costs?
Break even point in units X Sales price
