Break-even Point

Mind Map by Gee_0599, updated more than 1 year ago
Created by Gee_0599 over 5 years ago


GCSE Business Mind Map on Break-even Point, created by Gee_0599 on 09/29/2014.

Resource summary

Break-even Point
1 Revenue = Number of sales x Price
2 TC = FC + VC
3 Profit + TR> TC
4 Loss = TR < TC
5 Break - even point = FIXED COSTS/ SELLING PRICE - VARIABLE COSTS (contribution)
6 Working out contribution
6.1 Selling price - variable costs
6.2 Work out how many units need selling to pay FC and breakeven
6.2.1 Fixed Costs/Contribution = No of units.
7 Impact of changes on a business
7.1 Increase in FC/VC causes BEP to increase
7.2 Decrease in FC/VC causes BEP to decrease
7.3 Increase in Selling price causes BEP to decrease
7.4 Decrease in Selling price causes BEP to Increase
8 When FC change
8.1 Rent Increase:
8.1.1 Increase staff salaries
8.1.2 Insurance increase
9 Change in VC
9.1 Supplier may increase goods
9.2 Wasting materials due to faulty goods
9.3 Increased VAt
9.4 Staff wage increase
9.5 Paying overtime
10 When Selling Prices change
10.1 A competitor has a big promotion and take your customers
10.2 Not selling products because they're too expensive
11 Drawing BE charts
11.1 Involve drawing three lines
11.1.1 Fixed costs
11.1.2 Total costs
11.1.3 Total revenue
12 Margin of safety
12.1 Actual sales - Break-even output= margin of safety

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