Business Management HL
Business Management HL
6
Chapters
223
Notes
Unit 1 - Introduction To Business Management
Unit 1 - Introduction To Business Management
Unit 2 - Human Resource Management
Unit 2 - Human Resource Management
Unit 3 - Finance & accounts
Unit 3 - Finance & accounts
Unit 4 - Marketing
Unit 4 - Marketing
Unit 5 - Operations management
Unit 5 - Operations management
Unit 6 - Assessment
Unit 6 - Assessment
IB Resources
Unit 5 - Operations management
Business Management HL
Business Management HL

Unit 5 - Operations management

Unlock The Secret To Break-Even Revenue: Master Figure 5.5.3 & Formulas

Word Count Emoji
677 words
Reading Time Emoji
4 mins read
Updated at Emoji
Last edited onย 14th Jun 2024

Table of content

Hello, future business tycoon! ๐ŸŒŸ Let's dive into the world of break-even revenue, an essential concept in Business Management. In this chapter, we will explore the break-even chart, break-even quantity, and break-even revenue calculations. Let's ride the learning bicycle ๐Ÿšด together and find out how many bicycles a company needs to sell to cover its costs. Let's go!

Break - even chart ๐Ÿ“Š

A break-even chart is a beautiful visual representation that shows the point at which total revenue equals total costs. In other words, it shows when a business starts to make a profit after covering both fixed and variable costs. In our example, the break-even chart (Figure 5.5.3) reveals that the break-even quantity is 50 bicycles, corresponding to a revenue of $6,000. Awesome, right?

Break - even revenue calculation ๐Ÿงฎ

Now, let's put our math hats on! ๐ŸŽฉ๐Ÿงฎ We can calculate break-even revenue using the following formula:

     sql

   Break-even revenue = (Fixed costs / Contribution per unit) × Price per unit
 

Don't be scared! We've got a fun example for you

Imagine you own a fantastic bicycle company. ๐Ÿšฒ For each bicycle you sell at $120, it costs you $70 to make (variable costs). Your fixed costs (rent, electricity, salaries, etc.) are $2,500. To find out the break-even revenue, apply the formula:

  • Contribution per unit = Price per unit - Variable costs = $120 - $70 = $50
  • Break-even revenue = ($2,500 / $50) × $120 = $6,000

Yay! This calculation shows that your break-even revenue is $6,000. It means you need to sell bicycles worth $6,000 to cover your costs. Once you reach that magical number, every bicycle you sell afterward will be pure profit! ๐ŸŽ‰๐Ÿ’ฐ

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Dive deeper and gain exclusive access to premium files of Business Management HL. Subscribe now and get closer to that 45 ๐ŸŒŸ

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IB Resources
Unit 5 - Operations management
Business Management HL
Business Management HL

Unit 5 - Operations management

Unlock The Secret To Break-Even Revenue: Master Figure 5.5.3 & Formulas

Word Count Emoji
677 words
Reading Time Emoji
4 mins read
Updated at Emoji
Last edited onย 14th Jun 2024

Table of content

Hello, future business tycoon! ๐ŸŒŸ Let's dive into the world of break-even revenue, an essential concept in Business Management. In this chapter, we will explore the break-even chart, break-even quantity, and break-even revenue calculations. Let's ride the learning bicycle ๐Ÿšด together and find out how many bicycles a company needs to sell to cover its costs. Let's go!

Break - even chart ๐Ÿ“Š

A break-even chart is a beautiful visual representation that shows the point at which total revenue equals total costs. In other words, it shows when a business starts to make a profit after covering both fixed and variable costs. In our example, the break-even chart (Figure 5.5.3) reveals that the break-even quantity is 50 bicycles, corresponding to a revenue of $6,000. Awesome, right?

Break - even revenue calculation ๐Ÿงฎ

Now, let's put our math hats on! ๐ŸŽฉ๐Ÿงฎ We can calculate break-even revenue using the following formula:

     sql

   Break-even revenue = (Fixed costs / Contribution per unit) × Price per unit
 

Don't be scared! We've got a fun example for you

Imagine you own a fantastic bicycle company. ๐Ÿšฒ For each bicycle you sell at $120, it costs you $70 to make (variable costs). Your fixed costs (rent, electricity, salaries, etc.) are $2,500. To find out the break-even revenue, apply the formula:

  • Contribution per unit = Price per unit - Variable costs = $120 - $70 = $50
  • Break-even revenue = ($2,500 / $50) × $120 = $6,000

Yay! This calculation shows that your break-even revenue is $6,000. It means you need to sell bicycles worth $6,000 to cover your costs. Once you reach that magical number, every bicycle you sell afterward will be pure profit! ๐ŸŽ‰๐Ÿ’ฐ

Unlock the Full Content! File Is Locked Emoji

Dive deeper and gain exclusive access to premium files of Business Management HL. Subscribe now and get closer to that 45 ๐ŸŒŸ