Break even

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  • Created by: konradeke
  • Created on: 31-03-16 10:54
What is breakeven?
The point at which the business is not making a profit or a loss
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What is break-even output?
The number of items that a business must sell to reach this point
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What is contribution per unit?
The difference between the selling price per unit and variable cost per unit
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What is the formula for contribution per unit?
Selling price - variable cost per unit
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What is the formula for break-even output?
Fixed cost / contribution per unit = Break-even point
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What is margin of safety?
How much output is above the break-even level of output
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How do you calculate margin of safety?
Actual output level - break-even level of output
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Other cards in this set

Card 2

Front

What is break-even output?

Back

The number of items that a business must sell to reach this point

Card 3

Front

What is contribution per unit?

Back

Preview of the front of card 3

Card 4

Front

What is the formula for contribution per unit?

Back

Preview of the front of card 4

Card 5

Front

What is the formula for break-even output?

Back

Preview of the front of card 5
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