1) What are fixed costs? a) Costs that change depending on how many units of a product are made e.g. raw materials b) Regardless of how many units are made, costs that will always stay the same e.g. rent 2) What are variable costs? a) Costs that change depending on how many units of a product are made e.g. raw materials b) Regardless of how many units are made, costs that will always stay the same e.g. rent 3) What is revenue? a) The money the business receives when selling a product b) The money a business has to spend to manufacture the product 4) How do you calculate Total Revenue? a) Total Revenue = Fixed Costs + Variable Costs b) Total Revenue = Selling Price x Quantity Sold 5) What are total costs? a) Total costs are the amount of money spent on paying a supplier for materials b) Total costs are the fixed costs and variable costs added together 6) How does a business calculate if it has made a profit/loss? a) Revenue - Total Costs = Profit/Loss b) Fixed Costs + Variable Costs = Profit/Loss 7) Using the break-even diagram, how much are fixed costs? a) £400 b) £1000 c) £0 8) Using the break-even diagram, how many units must be sold to break-even? a) 0 units b) £0 c) £100 d) 100 units 9) Using the break-even graph, if Total Costs - Fixed Costs = Variable Costs, how much are variable costs at the break-even point? a) £600 b) £400 10) Why does businesses work out their break-even point? a) To find out how many units of a product they have to sell before they want to make a profit b) So they can tell customers whether they will be able to sell the product or not

Break-Even

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