Break Even – Flipped Learning Notes

Break-even definition:

What is contribution?

Break-even formula:

Step 1 –

Step 2 –

Label this break-even chart, including the axis:

Label the axis

Label the axis

What is the break-even point and how do you identify it on the chart?

What is the margin of safety and how do you identify it on the chart?

What is the formula for the margin of safety?

Complete the matching activity on slide 6:

Key Term Definition

Break even
Total revenue
Fixed costs
Variable costs
Margin of safety
Total costs

Positives and Limitations of Break Even

Positives Limitations

What – If: What can change the Break Even Point?

Does this result in a higher Does this result in a lower

break-even point? break-even point?
Price rise
Price fall
Rise in demand
Fall in demand
Rise in variable costs
Fall in variable costs
Rise in fixed costs
Fall in fixed costs

The usefulness of Break Even to a Business and its Stakeholders

Business:

Stakeholders:

Investors/ shareholders –

Managers -