Gr 11 Math Lit: Ch 3.10 Break Even Analysis

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What is the break-even quantity formula?

$$\frac{\text{Fixed Costs}}{\text{Variable Cost per Unit}}$$

$$\frac{\text{Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}$$ (correct)

$$\frac{\text{Variable Cost per Unit}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}$$

$$\frac{\text{Selling Price per Unit}}{\text{Fixed Costs} - \text{Variable Cost per Unit}}$$

What is the formula to calculate the total cost?

$$\text{Total Cost} = \text{Fixed Costs} + (\text{Variable Cost per Unit} \times \text{Number of Units Sold})$$ (correct)

$$\text{Total Cost} = \text{Fixed Costs} \times \text{Number of Units Sold}$$

$$\text{Total Cost} = \text{Variable Cost per Unit} - \text{Number of Units Sold}$$

$$\text{Total Cost} = \text{Fixed Costs} - (\text{Variable Cost per Unit} \times \text{Number of Units Sold})$$

What is the break-even income?

The variable cost per unit at the break-even quantity

The total revenue at the break-even quantity (correct)

The total cost at the break-even quantity

The selling price per unit at the break-even quantity

What is the formula to calculate the income?

$$\text{Income} = \text{Selling Price per Unit} \times \text{Number of Units Sold}$$ Signup and view all the answers

What is the purpose of calculating the break-even quantity?

To determine the number of units that must be sold to cover all costs Signup and view all the answers

What are the two components of total cost?

Fixed costs and variable costs Signup and view all the answers

What is the break-even point in a business context?

The point where the business's income equals its total expenses Signup and view all the answers

What does the horizontal axis value in the graphical representation of break-even point represent?

The quantity of items sold Signup and view all the answers

What is the first step in the graph method to determine the break-even value?

Draw two graphs: one for total costs and one for total income Signup and view all the answers

What is the formula for the income equation in break-even analysis?

Income = Selling Price per Unit × Number of Units Sold Signup and view all the answers

What is the purpose of the trial and improvement method in break-even analysis?

To find the exact break-even point by iteratively adjusting values Signup and view all the answers

What is the variable cost per unit multiplied by in the cost equation?

Number of units sold Signup and view all the answers

What is the benefit of determining the break-even point in a business?

It helps to determine the point where the business avoids a loss and starts making a profit Signup and view all the answers

What is the graphical representation of the break-even point?

The intersection of the total cost and total income graphs Signup and view all the answers

What is the result of solving the income equation equal to the cost equation?

The break-even quantity. Signup and view all the answers

What happens to the total cost when the number of units sold increases?

It increases. Signup and view all the answers

What is the difference between the selling price per unit and the variable cost per unit in the break-even point calculation?

Contribution margin. Signup and view all the answers

What is the relationship between the break-even quantity and the fixed costs?

The break-even quantity is inversely proportional to the fixed costs. Signup and view all the answers

What happens to the break-even quantity if the selling price per unit increases?

It decreases. Signup and view all the answers

What is the significance of the break-even quantity in a business?

It is the quantity at which the business breaks even. Signup and view all the answers

What is the primary importance of determining the break-even point in a business?

To avoid a loss and start making a profit Signup and view all the answers

Outside of a business context, what does the break-even point refer to?

The values for which two things are equal Signup and view all the answers

What is the graphical representation of the break-even point?

The intersection of two graphs: one representing costs and the other representing income Signup and view all the answers

What is the main difference between the graphical method and the trial and improvement method of determining the break-even point?

The graphical method uses graphs, while the trial and improvement method uses equations Signup and view all the answers

What is the purpose of using the trial and improvement method in break-even analysis?

To determine the exact break-even point Signup and view all the answers

What is the relationship between the break-even point and the business's income?

The break-even point is the minimum income a business must make to avoid a loss Signup and view all the answers

What is the advantage of using the graphical method to determine the break-even point?

It provides a visual representation of the break-even point Signup and view all the answers

What is the main assumption underlying the break-even analysis?

The costs and income of the business will always be equal at the break-even point Signup and view all the answers

What is the primary reason for calculating the break-even point in a business?

To understand the relationship between costs and income Signup and view all the answers

What is the key assumption underlying the break-even analysis?

The selling price per unit is fixed Signup and view all the answers

What is the main advantage of using the graphical method to determine the break-even point?

It helps to visualize the relationship between costs and income Signup and view all the answers

What happens to the break-even quantity if the fixed costs increase?

It increases Signup and view all the answers

What is the effect on the break-even quantity if the fixed costs and the variable cost per unit both increase by the same percentage?

The break-even quantity will remain the same Signup and view all the answers

What is the relationship between the break-even point and the business's income?

The break-even point is the point where the business's income equals its costs Signup and view all the answers

If the selling price per unit is $100 and the variable cost per unit is $60, what will be the effect on the break-even quantity if the fixed costs increase by $1,000?

The break-even quantity will increase by 5 units Signup and view all the answers

What is the relationship between the number of units sold and the total cost?

The total cost is directly proportional to the number of units sold Signup and view all the answers

What is the main difference between the graphical method and the trial and improvement method of determining the break-even point?

The graphical method provides a visual representation, while the trial and improvement method uses equations Signup and view all the answers

What is the effect on the break-even quantity if the selling price per unit increases by 10% and the variable cost per unit decreases by 10%?

The break-even quantity will decrease Signup and view all the answers

What is the result of solving the income equation equal to the cost equation in break-even analysis?

The break-even quantity Signup and view all the answers

What is the effect on the income if the number of units sold increases by 10%?

The income will increase by 10% Signup and view all the answers

What is the significance of the break-even point in a business?

It is the point where the business's income equals its costs Signup and view all the answers

What is the relationship between the break-even quantity and the fixed costs?

The break-even quantity is directly proportional to the fixed costs Signup and view all the answers

Gr 11 Math Lit: Ch 3.10 Break Even Analysis

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Questions and Answers

What is the break-even quantity formula?

What is the formula to calculate the total cost?

What is the break-even income?

What is the formula to calculate the income?

What is the purpose of calculating the break-even quantity?

What are the two components of total cost?

What is the break-even point in a business context?

What does the horizontal axis value in the graphical representation of break-even point represent?

What is the first step in the graph method to determine the break-even value?

What is the formula for the income equation in break-even analysis?

What is the purpose of the trial and improvement method in break-even analysis?

What is the variable cost per unit multiplied by in the cost equation?

What is the benefit of determining the break-even point in a business?

What is the graphical representation of the break-even point?

What is the result of solving the income equation equal to the cost equation?

What happens to the total cost when the number of units sold increases?

What is the difference between the selling price per unit and the variable cost per unit in the break-even point calculation?

What is the relationship between the break-even quantity and the fixed costs?

What happens to the break-even quantity if the selling price per unit increases?

What is the significance of the break-even quantity in a business?

What is the primary importance of determining the break-even point in a business?

Outside of a business context, what does the break-even point refer to?

What is the graphical representation of the break-even point?

What is the main difference between the graphical method and the trial and improvement method of determining the break-even point?

What is the purpose of using the trial and improvement method in break-even analysis?

What is the relationship between the break-even point and the business's income?

What is the advantage of using the graphical method to determine the break-even point?

What is the main assumption underlying the break-even analysis?

What is the primary reason for calculating the break-even point in a business?

What is the key assumption underlying the break-even analysis?

What is the main advantage of using the graphical method to determine the break-even point?

What happens to the break-even quantity if the fixed costs increase?

What is the effect on the break-even quantity if the fixed costs and the variable cost per unit both increase by the same percentage?

What is the relationship between the break-even point and the business's income?

If the selling price per unit is $100 and the variable cost per unit is $60, what will be the effect on the break-even quantity if the fixed costs increase by $1,000?

What is the relationship between the number of units sold and the total cost?

What is the main difference between the graphical method and the trial and improvement method of determining the break-even point?

What is the effect on the break-even quantity if the selling price per unit increases by 10% and the variable cost per unit decreases by 10%?

What is the result of solving the income equation equal to the cost equation in break-even analysis?

What is the effect on the income if the number of units sold increases by 10%?

What is the significance of the break-even point in a business?

What is the relationship between the break-even quantity and the fixed costs?

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