Break even

ellstar
Mind Map by ellstar , updated more than 1 year ago
ellstar
Created by ellstar over 5 years ago
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Mind Map on Break even, created by ellstar on 10/09/2014.
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Break even
1 fixed costs
1.1 This doesn't change with output
1.1.1 examples - rent
1.1.1.1 Salary
2 Variable costs
2.1 example - wages
2.1.1 this does change with output
2.1.1.1 advantages and disadvantages
2.1.1.1.1 sales needed to break even
2.1.1.1.1.1 advantages
2.1.1.1.1.1.1 shows changes of output
2.1.1.1.1.2 disadvantages
2.1.1.1.1.2.1 it assumes all output
2.1.1.1.1.2.1.1 the plotting of the points have to be accurate
2.1.2 raw materials
3 break even analysis
3.1 it shows the point at which the business to start making profit
3.2 it can be used to calculate the sales needed to make a profit at any given price
3.3 a business finds the break even point when they want to make changes in price
3.4 also given to work out profit
4 table and chart
4.1 step 1 - complete the table
4.1.1 step 2 - plot fixed costs
4.1.1.1 step 3 - plot variable costs
4.1.1.1.1 step 4 - plot total costs
4.1.1.1.1.1 step 5 - plot sales
4.1.1.1.1.1.1 step 6 - when the lines (sales&total) cross this is the break even
4.1.1.1.1.1.1.1 circle it and draw a line down to the number that it goes to
5 revenue
5.1 this is how much the business makes
5.2 total revenue
5.2.1 formulas
5.2.1.1 number of sales x selling price
5.2.1.2 total cost
5.2.1.2.1 fixed cost + variable costs
5.2.1.2.1.1 how ICT spreadsheet help us with break even analysis
5.2.1.2.1.1.1 if you need to add something the computar will change and do it for you
5.2.1.2.1.1.1.1 a lot more accurate
5.2.1.2.1.1.1.1.1 also is quicker as it will only take a few seconds
5.2.1.3 profit
5.2.1.3.1 total revenue - total costs
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