Business Studies – 4.4.3 Break-even analysis | e-Consult
4.4.3 Break-even analysis (1 questions)
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Answer:
Here's the break-even point calculation:
Break-Even Point Calculation
| Cell | Value |
| Fixed Costs (£) | 50,000 |
| Selling Price per Unit (£) | 15 |
| Variable Cost per Unit (£) | 8 |
| Break-Even Output (Units) | 625 |
Calculation:
Break-Even Output = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)
Break-Even Output = £50,000 / (£15 - £8) = £50,000 / £7 = 714.29
Therefore, XYZ Ltd. needs to sell 715 units to break even.