Calculating Break-even (Edexcel IGCSE Business)
Revision Note
Written by: Lisa Eades
Reviewed by: Steve Vorster
Calculating Break-even
The break-even point is calculated using the formula
Worked Example
Mięsisty Burgers has the following financial information for the month of May.
| € May |
Raw materials for each burger | 2.10 |
Packaging for each burger | 0.20 |
Fixed costs | 1 730 |
Selling price of each burger | 4.95 |
(a) Using the information in the table, calculate the level of output required to break even in May. You are advised to show your workings (3 marks)
Step 1 - Calculate the variable costs per burger
(1 mark)
Step 2 - Calculate the contribution per burger
(1 mark
Step 3 - Substitute the values into the break-even formula
(1 mark)
Examiner Tips and Tricks
Always round up the break even point to the nearest whole unit
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