Belfast Metropolitan College

Belfast Met is the largest further and Higher Education College in Northern Ireland and one of the largest in the UK.

Mastering Break Even Analysis

Break Even Analysis

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Slide 1: Slide

TourismFoundation Degree

This lesson contains 14 slides, with interactive quiz, text slides and 1 video.

Lesson duration is: 90 min

Items in this lesson

Break Even Analysis

Slide 1 - Slide

Learning Objective

Understand the concept of break-even analysis and its application in business decision-making

Carry out break even point calculations

Draw a break even chart on graph paper

Slide 2 - Slide

Has anyone studied break even before?

Yes

Slide 3 - Poll

Components of Break-Even Analysis

Fixed costs

Variable costs

Selling price

Slide 4 - Slide

Definition of Break-Even Analysis

Break-even analysis is a calculation used to determine the point at which revenue received equals the costs associated with receiving the revenue.

Slide 5 - Slide

Importance in Decision Making

Break-even analysis helps businesses in setting prices, determining the impact of cost changes, and making investment decisions.

Slide 6 - Slide

Break-Even Point Calculation

Fixed costs

_____________

Selling price per unit - Variable cost per unit

Slide 7 - Slide

Slide 8 - Video

Graphical Representation

Break-even analysis can be visually represented through a graph, showing the intersection of the revenue and cost lines.

Slide 9 - Slide

Slide 10 - Slide

www.bbc.co.uk

Slide 11 - Link

Example.....

A business that sells T-shirts knows that:

Its fixed costs are £400.

The selling price (per unit) is £10.

The variable costs (per unit) are £6.

So their BEP can be calculated as:

Slide 12 - Slide

Slide 13 - Slide

Practice Task and Assignment Task 4