Recap on brake even for the January examination !

Learners should for a PASS (C):

• Be able to define break-even - the point that a business has made enough money through product sales to cover the costs of making the product (no profit and no loss)

• Be able to interpret (point out or identify) from a brake even chart: the 

• break even point
• profit
• loss
• variable costs
• fixed costs
• total revenue
• total costs
• margin of safety

• Be able to calculate the break-even (formula will be given in the given assessment) using method 1, 2 or both

Method 1 - Contribution Method   For a PASS


Break-even point    =                            total fixed costs
       (output)                    selling price per unit - variable cost per unit


Method 2 - The Break Even Point - (BEP) Graph Method or Seven Steps to Break Even Heaven click here

Learners should for a MERIT (B)

• Be able to analyse and explain the value and importance of break even analysis to businesses when planning for success 

• Analyse and explain the associated risks to a business of not completing a break-even analysis 

• Present given information graphically on a break even chart 

Learners should for a DISTINCTION (A)

• Analyse the effect on the break even point if sales or (fixed and variable) costs change, and explain the impact of these changes on the business 

That's all you need to know now test yourself here

Good luck and enjoy

NEXT STEPS in our next lesson - don't wait for Mr T and the other lazy slackers click here

Mr T