Break even

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


Mind Map on Break even, created by ellstar on 10/09/2014.

Resource summary

Break even
1 fixed costs
1.1 This doesn't change with output
1.1.1 examples - rent Salary
2 Variable costs
2.1 example - wages
2.1.1 this does change with output advantages and disadvantages sales needed to break even advantages shows changes of output disadvantages it assumes all output 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 step 3 - plot variable costs step 4 - plot total costs step 5 - plot sales step 6 - when the lines (sales&total) cross this is the break even 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 number of sales x selling price total cost fixed cost + variable costs how ICT spreadsheet help us with break even analysis if you need to add something the computar will change and do it for you a lot more accurate also is quicker as it will only take a few seconds profit total revenue - total costs
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