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.