How to find the break-even point
The break-even point is the level of sales with no profit and no loss. Work it out in units and in pounds.
Task 1Break-even in units and in pounds4 questions
The break-even point is the level of sales where total contribution exactly covers the fixed costs. Profit is nil.
The break-even point in units is fixed costs divided by the contribution from one unit. Multiply it by the selling price to get the break-even sales revenue.
Larkfield's fixed costs are £13,500 a month. Each candle sells for £15 and gives a contribution of £9.
Task 2Either side of break-even3 questions
Task 3When the figures change2 questions