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Btec Business Revision Test Exam With Complete Solutions
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Btec Business Revision Test Exam With Complete Solutions
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Btec Business Revision Test Exam WithComplete Solutions
Breakeven CORRECT ANSWERS When revenue and expenditure are the same. there
is no profit or loss
variable costs CORRECT ANSWERS raw materials, change as output increases
margin of safety CORRECT ANSWERS is the amount by which sales would have to fall
before the break-even point is reached
total costs CORRECT ANSWERS fixed costs plus variable costs
break-even point CORRECT ANSWERS when a business has made enough money
through product sales to cover the cost of making the product
selling price CORRECT ANSWERS total revenue divided by maximum number of
products
increasing the price CORRECT ANSWERS break even point falls
reduce the price CORRECT ANSWERS break even point becomes higher
break even analysis CORRECT ANSWERS planning tool that helps businesses to
make the right decisions and increase their chances of success
benefits of break even analysis CORRECT ANSWERS business knows the fixed and
variable costs linked to a product.
the business can set the best price for a product.
it allows the business to set a margin of safety.
risks of ignoring breakeven analysis CORRECT ANSWERS the business does not
know the costs of production and running costs.
the business does not know how many items it must sell to make a profit.
the business may make a loss without realising or knowing why.
break even point will change CORRECT ANSWERS if costs change or if the selling
price changes
if costs fall CORRECT ANSWERS the breakeven point is lower so the business makes
a profit
the lower the breakeven point CORRECT ANSWERS the fewer the sales needed to
make a profit
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