Free Printable GCSE Business Studies: Break-even 101

Worksheets

GCSE Business Studies: Break-even 101

Total questions: 10

Worksheet time: 7mins

Name

Class

Date

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

What assumption does this statement say "Break even is 54 units"?

if we sell 55 we aren't making a profit

if we sell 54 we begin to make a profit

if we sell 55 we begin to make a profit

if we sell 54 we are not yet at break even point

What is one limitation to calculating break even?

helps projected sales

based on estimates

based on multiple products

considers stock wastage

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

Total Production

Total Revenue

Total Fixed Costs

Total Units

Some business costs are classified as fixed costs because they

must be paid within a set time

don't change when sales go up or down

are unpredictable and must be estimated

cost all businesses the same amount

It may be difficult for a new business to predict its variable costs because new businesses

are sometimes short of working capital

don't have access to industry figures

may have inexperienced employees

don't have past sales records

The formula to calculate revenue is:

REVENUE = FIXED COSTS + VARIABLE COSTS

REVENUE = VARIABLE COSTS * PRICE

REVENUE = UNITS SOLD * PRICE

REVENUE = UNITS SOLD * TOTAL COSTS

The formula to calculate Total Cost is:

TOTAL COST = VARIABLE COSTS X FIXED COSTS

TOTAL COST = VARIABLE COSTS + FIXED COSTS

TOTAL COST = REVENUE - VARIABLE COSTS

TOTAL COST = REVENUE - FIXED COSTS

What is represented by the purple region in the break even diagram shown here?

The break even point

Profit

Loss

10.

What is represented by the orange region in the break even diagram shown here?