A what level of production does the business start to make a profit? Break-even analysis A what level of production does the business start to make a profit?

Example Snoodles are sold for a price of $4 each. The variable costs of producing 1 snoodle is $2.4 The total fixed costs of the business amount to $25,000 The business currently makes and sells 17,000 snoodles. What is the break-even point?

Output TFC ($) TVC ($) TC ($) TR ($) 25,000 17,000 40,800 65,800 25,000 17,000 40,800 65,800 68,000 Total fixed costs are fixed at $25,000 Total variable costs = unit variable cost x quantity produced Total costs = TFC + TVC Total revenue = Price x quantity

Estimate break-even quantity from graph Calculate margin of safety Calculate current profit