4082158
Description
Mind Map by joan.halpin, updated more than 1 year ago
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Created by Gee_0599
over 9 years ago
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Copied by joan.halpin
over 9 years ago
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Break-even Point
- Profit =TR> TC
- Loss = TR < TC
- Impact of changes on a business
- Increase in FC/VC causes BEP to increase
- Decrease in FC/VC causes BEP to decrease
- Increase in Selling price
causes BEP to decrease
- Decrease in Selling price
causes BEP to Increase
- Increase in FC/VC causes BEP to increase
- Drawing BE charts
- Involve drawing three lines
- Fixed costs
- Total costs
- =FC+VC
- =FC+VC
- Total revenue
- No of units sold x Sp
- No of units sold x Sp
- Fixed costs
- Involve drawing three lines
- Margin of safety
- Actual sales - Break-even point=
margin of safety
- Actual sales - Break-even point=
margin of safety
- Break Even Cost in units
=Fixed Costs /Selling Price -
Variable cost
- Break Even point in Euros
= B/E point units x Selling
Price
- Break Even point in Euros
= B/E point units x Selling
Price
- Fixed Costs remain the same
regardless of output eg. Rent
- Variable cost vary with output
eg. raw materials
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