1. Variable cost (e.g. materials) = £5 per unit
Typical Business Problem
Fixed cost, (e.g. rent) = £500
Variable cost (e.g. materials) = £5 per unit
Income from sales = £10 per unit
How many units must be sold to break even ?
ready

2. £ Typical Business Problem Costs = £500 + £5 per unit
Units 50
100
150
200
£2000
£1500
£1000
£500
Costs = £500 + £5 per unit
Income = £10 per unit
How many units to break even ?
ready

3. £ Typical Business Problem Costs = £500 + £5 per unit
£2000
£1500
Costs = £500 + £5 per unit
£1000
Income = £10 per unit
£500
How many units to break even ?
Fixed cost =£500 50
100
150
200
Units
ready

4. £ Typical Business Problem Costs = £500 + £5 per unit
£2000
£1500
Costs = £500 + £5 per unit
Variable
Cost
£1000
Income = £10 per unit
£500
How many units to break even ?
Fixed cost =£500 50
100
150
200
Units
ready

5. £ Typical Business Problem Total Costs Costs = £500 + £5 per unit
£2000
Total
Costs
£1500
Costs = £500 + £5 per unit
Variable
Cost
£1000
Income = £10 per unit
£500
How many units to break even ?
Fixed cost =£500 50
100
150
200
Units
ready

6. £ Typical Business Problem Income Total Costs
£2000
Total
Costs
£1500
Costs = £500 + £5 per unit
Variable
Cost
£1000
Income = £10 per unit
£500
How many units to break even ?
Fixed cost =£500 50
100
150
200
Units
ready

7. £ Typical Business Problem Income Total Costs
£2000
Total
Costs
£1500
Costs = £500 + £5 per unit
Variable
Cost
£1000
Income = £10 per unit
£500
How many units to break even ?
Fixed cost =£500
Break even when income = total cost 50
100
150
200
Units
Answer: 100 units to break even
complete