1. Slide 1 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Starter How many words can you find in the business term: ‘Break – even’ ?

2. Slide 2 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment The Big Picture Our lesson objective is… To learn how to draw break – even charts By the end of this lesson: All students can differentiate between fixed and variable costs Most students can show costs on a diagram Some students can calculate break even point

3. Slide 3 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Break even... Firms spend money making their products. These are called costs. Variable costs = Change depending on output Fixed costs = remain the same no matter how much is produced

4. Slide 4 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Cost sort! Fixed or variable costs? Rent Advertisin g Maintenance of machinery Managers ’ salaries Interest payments on loans Electricity costs Overtime pay Raw materials

5. Slide 5 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Starter Fixed costs Variable costs Rent Advertisin g Maintenance of machinery Managers ’ salaries Interest payments on loans Electricity costs Overtime pay Raw materials

6. Slide 6 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Sales revenue Firms get money from selling their products. This is called sales revenue...

7. Slide 7 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Break even... Break even is the point at which the sales are exactly the same as the costs. Total costs = Fixed costs + variable costs Sales revenue = Selling price x number of units sold Profit = Sales revenue – total costs

8. Slide 8 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Evans Cricket Bats Ltd Stage 1: Complete this table... Output (No of cricket bats) Fixed costs Variable costs Total costsSales revenue 1,000£40,000 2,000£40,000 3,000£100,000 4,000£140,000

9. Slide 9 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Evans Cricket Bats Ltd Check your answers... Output (No of cricket bats) Fixed costs Variable costs Total costsSales revenue 1,000£40,000£20,000£60,000£35,000 2,000£40,000 £80,000£70,000 3,000£40,000£60,000£100,000£105,000 4,000£40,000£80,000£120,000£140,000

10. Slide 10 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Stage 2: Showing costs on a graph... Turn your paper so it is LANDSCAPE and copy this... Costs (£) Output (No of cricket bats) 1000200030004000

11. Slide 11 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Showing costs on a graph... Insert fixed costs Costs (£) Output (No of cricket bats) 1000200030004000

12. Slide 12 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Showing costs on a graph... Add in variable costs... Costs (£) Output (No of cricket bats) 1000200030004000

13. Slide 13 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Showing costs on a graph... Calculate total costs... Costs (£) Output (No of cricket bats) 1000200030004000 Total costs Variable costs Fixed costs

14. Slide 14 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Showing revenue on a graph Now add revenue to your graph.... Costs (£) Output (No of cricket bats) 1000200030004000 Total costs Variable costs Fixed costs

15. Slide 15 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Showing revenue on a graph Now add revenue to your graph.... Costs and sales revenue (£) Output (No of cricket bats) 1000200030004000 Total costs Variable costs Fixed costs Sales revenue

16. Slide 16 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Break – even tasks... Now have a go at the break – even exercise sheets...

17. Slide 17 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Check your work How did you get on? No. soldSales Revenue Fixed Costs Variable Costs Total Costs Profit/ Loss 0£0£200£0£200(200) 10£80£200£20£220(140) 20£160£200£40£240(80) 30£240£200£60£260(20) 40£320£200£80£28040

18. Slide 18 Notebook Friday, 22 August 2014Registration Respect yourself - Respect each other - Respect the environment Review What have you learnt today?