breakeven 1.0 / 5 based on 1 rating ? Business StudiesFinancial PlanningASEdexcel Created by: aleyshea darCreated on: 05-03-16 18:39 breakeven point the point at which sales/revenue and total costs are the equal 1 of 11 breakeven calculation fixed costs / contribution 2 of 11 contribution selling price - variable costs 3 of 11 margin of safety amount sales can drop before reaching the BEP (breakeven point) 4 of 11 fixed costs not directly linked to the level of output (how much is produced) e.g. rent, insurance 5 of 11 variable costs directly linked to the level of output (how much is produced) e.g. raw materials 6 of 11 margin of safety calculation if current sales are 2000 and the BEP is 1200. the margin of safety will be 2000 - 1200 = 800 units 7 of 11 benefits of BEP calculate the minimum sales needed to breakeven and prevent a loss 8 of 11 benefits of BEP examine the impact of any changes of variable costs, fixed costs or selling price on the breakeven point 9 of 11 benefits of BEP is worth while producing/ selling a particular good/service 10 of 11 limitations of BEP estimates of sales/ costs may not be 100% accurate 11 of 11
Comments
No comments have yet been made