Break Even

Break Even Analysis

NCFE 1/2 Technical Award in Business and Enterprise ​

What is Break Even Point?

In very simple terms, the breakeven point is the moment where your business has made enough money to recover costs. So when people talk about breaking even, they mean the point at which the total cost and the total revenue are balanced. The breakeven point (or BEP) is the fine line between profit and loss.

Multiple Choice

What does break even point show?

• where a business is neither making a profit or loss
• how many items to make
• how much profit they're making
• where a business has more fixed costs than variable

Multiple Choice

How is break even point measures?

• dollars
• loss
• profit
• items

Multiple Choice

What is the margin of safety?

• the margin between projected units and break even point units
• the margin between profit and loss
• the margin between units and sales
• the margin between each break even point

Multiple Choice

Which one is an example of a fixed cost?

• resources
• materials
• temporary wages
• rates

Multiple Choice

What is contribution margin?

• cost price - selling price
• fixed costs - variable costs
• selling price - variable cost
• selling price - cost price

Multiple Choice

What is one limitation to calculating break even?

• helps projected sales
• based on estimates
• based on multiple products
• considers stock wastage

Multiple Choice

To draw the BE graph you must plot Total Costs and ........

• Total Production
• Total Revenue
• Total Fixed Costs
• Total Units

Math Response

A business sold 340 units in one month, its fixed costs are £3600 and Variable Costs per unit are £9. Work out the Total Costs for ONE month (2)

Type answer here

Correct Answer: 6660

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