BREAK EVEN FORMULAS: 5.5 IB BUSINESS MANAGEMENT

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5.5 break even formulas

12 Terms

1

Break even quantity

fc/ sp - avc

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2

contribution per unit

price per unit - variable cost per unit

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3

total contribution

total revenue - total variable cost

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4

total contribution

contribution per unit * number of units sold

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5

profit

tc - tfc

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6

break even point

fc - contribution per unit

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7

margin of safety

current output - breakeven output

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8

total revenue

p * q

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9

total costs

tfc + tvc

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10

p * q is the same as

tfc + tvc

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11

target profit output

fc + target profit/ contribution per unit

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12

break even revenue

fc/ contribution per unit * price per unit

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