Break Even *Expense & Revenue

Front

What is the Break Even Point?

Back

The Break Even Point is the level of sales at which total revenues equal total expenses, resulting in neither profit nor loss.

Front

How do you determine the Break Even Point graphically?

Back

Graph the expense function and revenue function on a coordinate plane and identify the point where the two lines intersect.

Tags

CCSS.8.EE.B.5

Front

What is the formula for the Expense Function?

Back

E = c * q, where E is total expenses, c is the cost per unit, and q is the quantity produced.

Tags

CCSS.HSF.LE.A.2

CCSS.8.F.B.4

Front

What are Variable Expenses?

Back

Variable Expenses are costs that change in direct proportion to the quantity of goods produced or sold.

Tags

CCSS.5.NBT.A.2

Front

What are Fixed Expenses?

Back

Fixed Expenses are costs that do not change regardless of the quantity produced, such as rent or salaries.

Tags

CCSS.HSF-LE.A.1B

Front

What does the variable 'q' represent in the Expense Function E = c * q?

Back

In the Expense Function, 'q' represents the quantity produced.

Tags

CCSS.HSF.LE.B.5

Front

What is the relationship between Revenue and Expenses at the Break Even Point?

Back

At the Break Even Point, total revenue equals total expenses.

Front

What is the significance of the slope in the expense function graph?

Back

The slope of the expense function graph represents the variable cost per unit produced.

Tags

CCSS.8.EE.B.5

Front

How can you express the Expense Function in terms of price (p) if given the demand equation q = -3p + 10?

Back

E = V(-3p + 10) + F, where V is the variable cost per unit and F is fixed costs.

Tags

CCSS.HSA.REI.B.3

Front

What is the impact of increasing Fixed Expenses on the Break Even Point?

Back

Increasing Fixed Expenses raises the Break Even Point, meaning more sales are needed to cover total costs.