2. Constructing a break-even graph: Brian’s Burgers

3. Constructing a Break-Even Graph
Sales
revenue
Total
Costs
Break-even
Point
Fixed
Costs
Output/Sales

4. Break-even table: based on a price of £200 per box of burgers
Number of Units 40 60 80
100
120
140
160
Fixed Costs
Variable Costs
Total Costs
Sales Revenue
5,000
5,000
5,000
5,000
5,000
5,000
5,000
6,000
9,000
12,000
15,000
18,000
21,000
24,000
11,000
14,000
17,000
20,000
23,000
26,000
29,000
8,000
12,000
16,000
20,000
24,000
28,000
32,000
Fixed costs are £5,000, the variable cost per unit is £150 per box of burgers.

5. Constructing a Break-Even Graph
£ Revenue
Sales
revenue
35,000
Total
Costs
30,000
25,000
Break-even
Point
Break even
Point =
100 boxes of
burgers
20,000
15,000
10,000
Fixed
Costs
5,000 40 60 80
100
120
140
160
Number of boxes produced/sold

6. A fixed cost is a cost that does not vary with output
True or false?
A fixed cost is a cost that does not vary with output
True

7. True or false?
The money received from customers when they pay for goods is called sales revenue.
True

8. An example of a variable cost is rent.
True or false?
An example of a variable cost is rent.
False

9. Sales revenue is a business cost.
True or false?
Sales revenue is a business cost.
False

10. True An example of a variable cost in Brian’s business is packaging.
True or false?
An example of a variable cost in Brian’s business is packaging.
True

11. If you charge a low price, a customer will always buy your product.
True or false?
If you charge a low price, a customer will always buy your product.
False