Exam (elaborations)
Edexcel A Level Business - Breakeven Charts Exam Questions
- Course
- Institution
- Book
Edexcel A Level Business - Breakeven Charts Exam Questions With ANSWERS
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Edexcel A Level Business - Exam Questions on Budgets 2
-
Edexcel A Level Business - Exam Questions on Budgets
-
Edexcel A Level Business Paper 1 June 2020 - Exemplar Answers
Seller
Follow
SameerL002
Reviews received
Content preview
18. Break-Even Charts Mark: /10Figure 1
20000
18000
16000
14000
12000
10000 Total Cost
8000 Total Revenue
6000
4000
2000
0
0 100 200 300 400 500 600 700 800
Figure 1 shows Mr Ikitar’s weekly break-even forecast for his new restaurant Strictly Sushi
1. a) What are his forecast fixed costs? [1]
£3,200
b) What is his forecast break-even point? [1]
£6,800 – 300 Customers
c) If his market research proves correct and he attracts 500 customers per week what will his profit
be? [2]
500 Customers – Costs = £9,200, Revenue = £11,200
Profit = Revenue – Costs
Profit = £11,200 - £9,200 = £2,000
2. Unfortunately his forecasts prove inaccurate and his fixed costs rise by £1000
a) Amend the break-even chart to show Mr Ikitar’s new total cost line. Label this TC2. [2]
b) Show his new margin of safety if he achieves 500 customers. Label this MS. [2]
c) Show the difference in profit as a result of the increase in fixed costs. Label this P2. [2]
Explain why a change in variable costs leads to a parallel shift in the total cost line.
A change in variable costs leads to a parallel shift in the total fixed costs. Variable costs are costs
and expenses that change as output varies at a fixed cost - so as variable costs change, so does
the fixed costs at a parallel rate. The variable costs are always changing, the fixed costs don’t
change and therefore the rate at which they both change is parallel
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller SameerL002. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.31. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
83662 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now