Business finance Flashcards
(5 cards)
1
Q
what is break even analysis?
A
A prediction of how many items have to be produced/sold before a profit is made
2
Q
Quantitative approach
the formula to calculate the
contribution per unit
A
price £ - variable costs per unit
3
Q
Formula for
break even output / Quantity
A
Fixed costs / contribution per unit
4
Q
formula for
total contribution
A
Contribution per unit £ x quantity
5
Q
the formula for both methods of profit
A
Method 1 -
total contribution - fixed costs
method 2 - Total revenue - total costs
