Break Even

Question 1

What line on a break even graph is flat?

Answer 1

Fixed costs

Question 2

What line on a break even graph starts from £0?

Answer 2

Sales revenue

Question 3

Which line on a break even graph starts on the fixed costs line?

Answer 3

Total costs

Question 4

What is it called when total revenue= total costs

Answer 4

Break even point

Question 5

What is margin of safety?

Answer 5

The amount by which the quantity sold is over the break even quantity

Question 6

What are limitations of break even analysis?

Answer 6

• doesn’t include competitors
• doesn’t account for discounts
• only a prediction
• only one product