Scribd
Upload
44 views3 pages

Break Even

Uploaded by

khushilol456
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
44 views3 pages

Break Even

Uploaded by

khushilol456
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Section 4

Operations management 18 Costs, scale of production


and break-even analysis

Worksheet 20: Break-even


Scenario
Donald Veezer is an entrepreneur who has decided to sell high quality tweezers to the cosmetics
market. After some research, he has come up with the following costs:
(all figures are in $)
Rent/month 1 650.00
Packaging per pair of tweezers 1.50
Salaries/month 10 000.00
Production wages/pair of tweezers 0.50
Loan repayments/month 600.00
Raw materials/pair of tweezers 3.00
Telephone/month 150.00
Office supplies/month 100.00
Donald plans to sell the tweezers for $10 per unit.

Task 1
Using a textbook or other source of reference as necessary, find and write down the definitions for:
a) Fixed costs __________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
b) Variable costs ________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
c) Total costs __________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
d) Total revenue ________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
e) Margin of safety ______________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

Cambridge IGCSE Business Studies Teacher’s CD © Hodder & Stoughton Limited 2013 1/3
Section 4
Operations management 18 Costs, scale of production
and break-even analysis
Task 2
Using Donald Veezer’s Tweezers cost information, split his costs into fixed and variable costs.

Fixed costs Variable costs

Task 3
Using the figures from the statement construct a break-even table using the Output/Sales figures
0, 1000, 2000, 3000, 4000, 5000.

Output/Sales 0 1000 2000 3000 4000 5000


Fixed cost
Variable cost
Total cost
Total revenue

Cambridge IGCSE Business Studies Teacher’s CD © Hodder & Stoughton Limited 2013 2/3
Section 4
Operations management 18 Costs, scale of production
and break-even analysis

Task 4
Construct a break-even graph. Plotting only lines for fixed costs, total cost and total revenue.

Task 5
Using the mathematical equation below for break-even, work out the number of units to be sold in
order to break-even. (Show all your workings.)
Fixed costs
Formula =
Selling price  Variable cost per unit
(Contribution)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

Cambridge IGCSE Business Studies Teacher’s CD © Hodder & Stoughton Limited 2013 3/3

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy