Btec Business Unit 1 P2 M Task
Break - even point
A firm that ‘Breaks – even’ make a profit or a loss on it product it is producing.
Formula to use for break even
Breakeven = Fixed Costs
Point (Selling Price – Variable Cost Per Unit)
£250000 (£1.50 – 70p) 80p = £31500 units
E.g.)
|0utput |FC |VC |TC |TR |Profit |
|0 |£250000 |0 |£250000 |£0 |-£250000 |
|50000 |£250000 |£35000 |£285000 |£75000 |-£210000 |
|100000 |£250000 |£70000 |£320000 |£150000 |-£170000 |
|150000 |£250000 |£105000 |£355000 |£225000 |-£130000 |
|200000 |£250000 |£140000 |£390000 |£300000 |-£90000 |
|250000 |£250000 |£175000 |£425000 |£375000 |-£50000 |
|300000 |£250000 |£210000 |£460000 |£450000 |-£10000 |
|350000 |£250000 |£245000 |£495000 |£525000 |£30000 |
|400000 |£250000 |£280000 |£530000 |£600000 |£70000 |
|450000 |£250000 |£315000 |£565000 |£675000 |£110000 |
|500000 |£250000 |£350000 |£600000 |£750000 |£150000
A firm that ‘Breaks – even’ make a profit or a loss on it product it is producing.
Formula to use for break even
Breakeven = Fixed Costs
Point (Selling Price – Variable Cost Per Unit)
£250000 (£1.50 – 70p) 80p = £31500 units
E.g.)
|0utput |FC |VC |TC |TR |Profit |
|0 |£250000 |0 |£250000 |£0 |-£250000 |
|50000 |£250000 |£35000 |£285000 |£75000 |-£210000 |
|100000 |£250000 |£70000 |£320000 |£150000 |-£170000 |
|150000 |£250000 |£105000 |£355000 |£225000 |-£130000 |
|200000 |£250000 |£140000 |£390000 |£300000 |-£90000 |
|250000 |£250000 |£175000 |£425000 |£375000 |-£50000 |
|300000 |£250000 |£210000 |£460000 |£450000 |-£10000 |
|350000 |£250000 |£245000 |£495000 |£525000 |£30000 |
|400000 |£250000 |£280000 |£530000 |£600000 |£70000 |
|450000 |£250000 |£315000 |£565000 |£675000 |£110000 |
|500000 |£250000 |£350000 |£600000 |£750000 |£150000