Paper 2 · break-even analysis

An enterprise breaks even at an output of 10 000 units. Each unit sells for $3 and has a variable cost of$ 1. What is the break-even point expressed in sales revenue?

A$10 000

B$20 000

C$30 000

D$40 000

Explanation: Break-even revenue is the break-even quantity multiplied by the selling price, so 10 000 x

3 =

30 000. The

10 000 figure uses the variable cost per unit and

20 000 is the contribution earned at break-even, which equals the fixed costs rather than the revenue.

Derived from ZIMSEC Business Enterprise Skills Paper 2, Nov 2023, Q1

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