Business Studies GCSE Unit 3 - Breakeven Analysis

Breakeven Analysis

Revision Notes

• In the production of goods, or provision of services, there are costs
• Costs may be fixed or variable.

Total Costs = Fixed Costs + Variable Costs

• Fixed costs do not vary with output, eg. rent. Thye are paid whether or not a business is producing goods, and regardless of how much a business is producing.
• Variable costs do change with output, eg. raw materials. The more you make the higher the variable costs.
• Semi-variable costs vary with output, but not directly. Eg. a business may need…