Interpreting break-even charts:

• At the break-even point, a business generates neither profit nor loss.


  True
• What type of costs vary with the quantity of goods produced?

  Variable costs
• The break-even point is the level of sales where total revenue equals total costs
• Match the component with its description:

  Total Revenue ↔️ Income from sales

  Total Costs ↔️ Sum of fixed and variable costs

  Break-Even Point ↔️ Revenue equals costs
• What are examples of variable costs?

  Raw materials, direct labor, packaging
• Revenue is calculated by multiplying the quantity of goods sold by their prices
• Revenue, along with fixed costs and variable costs, helps determine profitability and break-even points
• What is the break-even point in sales terms?

  Total revenue equals total costs
• The break-even point is the level of sales where total revenue equals total costs
• Fixed costs are costs that do not change with production levels
• At the break-even point, what is the relationship between total revenue and total costs?

  Total revenue equals total costs
• At the break-even point, a business generates neither profit nor loss.

  True
• Fixed costs remain constant regardless of production volume
• How is revenue calculated?

  Price per unit × number of units sold
• What is the formula for marginal revenue?

  Change in total revenue ÷ change in quantity sold
• The key components of a break-even chart include fixed costs, variable costs, total revenue, and total costs
• What are fixed costs in a business?

  Costs that do not change
• What are examples of fixed costs?

  Rent, salaries, insurance
• Unlike fixed costs, variable costs fluctuate with output.

  True
• Where is the break-even point located on a break-even chart?

  Intersection of revenue and costs
• Fixed costs are expenses that do not change with production volume
• What are variable costs per unit?

  Expenses that increase with production
• What does a break-even chart show in relation to profit and loss areas?

  Sales and costs
• Why is identifying the break-even point important for businesses?

  Determines sales required to profit
• Match the component of a break-even chart with its description:

  Fixed Costs ↔️ Expenses that do not change with production levels

  Variable Costs ↔️ Expenses that vary with output

  Total Revenue ↔️ Income from sales

  Break-Even Point ↔️ Total revenue equals total costs
• Unlike fixed costs, variable costs change directly with output
• Understanding total revenue, fixed costs, and variable costs is essential for determining profitability.


  True
• Marginal revenue is the income from selling one additional unit.


  True
• The break-even point signifies no profit and no loss.

  True
• What is the break-even point in units if fixed costs are $10,000, selling price per unit is $50, and variable costs per unit are $30?

  500 units
• What does the margin of safety indicate for a business?

  Risk tolerance
• A margin of safety of 33.33% means sales can decrease by that amount before losses occur.

  True
• What is the break-even point defined as?

  Total revenue equals total costs
• What does a break-even chart illustrate the relationship between?

  Total revenue and total costs
• What is the term for income from sales at different output levels?

  Total revenue
• What are examples of fixed costs?

  Rent, salaries, insurance
• Variable costs change proportionally with production levels.


  True
• Total revenue is the income earned from all sales within a period.

  True
• At the break-even point, what is the relationship between total revenue and total costs?

  Total revenue equals total costs
• A break-even chart is a graphical representation of a business's costs, revenue, and profit