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Break-Even Point

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Q = CF / (P − CVu)

About this exam

The break-even point is how many units a company must sell to make neither a profit nor a loss: Q = FC / (P − VCu), fixed costs divided by the margin each unit leaves. In this exam you calculate it and type the number, as in a real Business Economics exam, instead of picking from options.

The figures are generated so the answer is always a whole number, so there are no rounding arguments. Higher levels add questions on profit or loss from a given level of sales, and on what happens to the break-even point if price or costs go up.

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