Break Even Point
How can Break even point be illustrated other than just writing the numbers down?
Break even chart/graph.
Define Break Even Point?
Businesses break even when income and expenditure are equal.
How do you calculate BEP?
fixed costs/(selling price per unit - variable cost per unit).
Name one disadvantage of Break even analysis?
* Difficult to apply if the business has many products. * BEP guesses that all output is sold at single price. * BEP is a quantitative tool and ignores any aspect of qualitative measures such as impact on stakeholders or the firms image. * Break even analysis is not sufficient in long term planning.
Name one advantage of Break even analysis?
* Helps a business owner when making important decision about there business. * Easy to understand and calculate. * BEP can be used in new projects or start- up to give approximate sales needed. *predictions
what is another name for operating costs?
Expenses.
How do you calculate TOTAL cost?
Fixed cost + Variable cost.