Business Studies (AS)·The accounting function, planning & controlling · NSSCAS 2.3
Break-even analysis: the point where costs meet revenue
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In this lesson you learn to calculate the break-even point, draw and read a conventional break-even chart line by line, and work out the margin of safety. We use Kauna's fat-cake stall in Katutura as our worked example. By the end you will be able to do the calculations, draw the chart in the exam, and judge how useful break-even analysis really is for making decisions.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Business Studies (AS) 2.3):
- compile and analyse a break-even chart
- calculate the break-even point
- assess the importance of break-even analysis, budgets and cash flow forecasts for decision making
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Miss Maria and Mike talk through the whole topic — with the figure and working drawn live.