Break-Even Charts

• What goes on the y-axis on a break-even chart?

  Costs and revenues
• What goes on the x-axis on a break-even chart?

  Output
• Fixed costs stay the same and are therefore a horizontal line
• What does the blue line represent?

  Revenue

  
• What does the red line represent?

  Total costs

  
• What does the green line represent?

  Fixed costs

  
• What is the break-even level of output in this chart?

  25 units

  
• In a break-even chart the total costs and the variable costs are parallel
• Where does the revenue line start in a break-even chart?

  Origin
• Where does the total costs line start in a break-even chart?

  Fixed costs
• Where does the variable costs line start in a break-even chart?

  Origin