Break even Point
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Variable cost
which change in the direct proportion to output, otherwise known as direct cost.
Fixed costs
costs which remain the same as output changes in the short run
Break even calculation:
BeP= Fixed costs/ Selling price - variable costs
Margin Safety
The amount by which output can be reduced without the business making a loss.
Contribution
The difference between selling price and variable costs.
Break even point
The point at which a business makes neither a profit nor a loss
Sales revenue
The value of goods or services produced and sold by the business.
