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BUSINESS FINANCE
BREAK-EVEN ANALYSIS
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Created by
Zarrin Dennis
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Cards (8)
What is amortization?
a
cost
associated with the falling in
value
of certain types of
assets
What is break-even point?
a level of
output
where
total costs
and
total revenue
are exactly the same. neither a
profit
or a
loss
is made
How do you calculate break-even point?
break-even point=
fixed costs
/
selling price
-
variable cost
per unit
What is a break-even chart?
a
graph
that shows the
total cost
and
total revenue
What is a margin of safety?
the amount of
output
available to be
sold
above the break-even point where the business makes a
profit
What does a break-even chart show?
how much
output
a business has to produce in order to
break even
the
costs
,
revenue
and
profit
at different levels of output
the
margin of safety
What is bulk-buying?
buying goods in
large
quantities, which is usually
cheaper
than buying in
small
quantities
What is a stockpile?
a large supply of
goods
that are being kept for possible use in the
future
