Breakeven Analysis Key Terms

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Ricky £

Cards (3)

  • Breakeven Analysis: Key Terms
    • Contribution: The difference between total revenue and total variable costs
    • Contribution Per Unit: The difference between selling price per unit and variable cost per unit
  • Breakeven Analysis: Key Terms
    • Margin of safety - The difference between actual output and breakeven output
    • Breakeven output - The output at which total revenue = total costs
  • Breakeven Formula:
    • Break-even output (units) = Fixed costs (£) / Contribution per unit (£)