A Level Business Break Even Analysis Help

Pros and Cons

I’ll attach a pic below of a list of pro’s and cons which my teacher gave us but I don’t rlly understand most points so I’ll highlight them and can someone plz explain them or if it’s incorrect then correct it plz

Also could this be a con:
It suggest that only one product is sold by the business however realistically they would have a wide product portfolio which the BEA doesn’t take into account?
Is this kinda correct? If not then correct plzz

Monsur x

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Reply 1

Cirxxbabz

F56AAED0-C3A3-4488-B5A4-BAE1E3C4BFDB.jpg.jpeg

Ok the highlighted advantage I get
Because we’ve also learnt how the BEP changed when variables change

But then why is the disadvantage FC can vary
Coz with BEA it consideres changes as I mentioned above

Anyone get me? I hope u do

Also explain those last two highlighted points plz

Reply 2

username4261124

The break-even analysis assumes that the changes in variable costs won't change-->

Take a cupcake shop for example

On a normal day, the cupcakes would cost £4.50
- The fixed costs are £450
- The costs of making the cupcake are £2.50

So using the equation the breakeven output is
Fixed costs/ contributions
£450/ £4.50-£2.50

- So to breakeven the output has to be: 225 cupcakes

Yet on Tuesdays, the owner takes £1.00 off so, therefore, the cupcake costs £3.50
Using the same costs the breakeven=
BE= £450/£3.50-£2.50
Break-even output= 450 cupcakes

So you cannot just use the breakeven for the normal price as this states that fewer cupcakes need to be sold to breakeven but indeed if the price changes this is not the case- in this case, more need to be sold

The last bullet point basically states that the model tells you how many units need to be sold i.e 10, yet will the business actual achieve these? It is all good saying that the business should sell 10 units but will it actually - this model doesn't promise that the business will achieve these sales, but just says how many it should achieve

Reply 3

username4261124

Hope this helps :smile:

- please as if you do not understand what I have written hahaha

Reply 4

Cirxxbabz

Original post by candicebetterman

Hope this helps :smile:

- please as if you do not understand what I have written hahaha

Omgggg thanks sooo much!!
Basically I have revise HARD this half term and I have so many q’s which lol I should’ve asked my teachers but 😂😂

Reply 5

username4261124

Original post by Monsur x

Omgggg thanks sooo much!!
Basically I have revise HARD this half term and I have so many q’s which lol I should’ve asked my teachers but 😂😂

Go for it ask away I loved answering that question

Reply 6

Cirxxbabz

Original post by candicebetterman

Go for it ask away I loved answering that question

Rlly?? Kl
Hope u don’t mind me asking, but wat level of education u at
A level or...

Monsur x

Reply 7

username4261124

yh y13

Original post by Monsur x

Rlly?? Kl
Hope u don’t mind me asking, but wat level of education u at
A level or...

Monsur x

Reply 8

Cirxxbabz

Original post by candicebetterman

yh y13

Rlly?!
Oh I’m in yr 12!
Wat exam board r u doing?

Aqa

Original post by candicebetterman

Aqa

Oh I’m doing edexcel
But basically I wanna do business at uni and in the future and rn at a levels it’s my worst subject....
Not my worst but my lowest grade is in that

We r doing theme 1 and 2 this yr
Any tips or suggestions?
Lool Yh it can be hard giving advice watever but

It’s just the long ads markerrrssss
Our longest is 20!

Reply 11

username4261124

What topics are included in these ?

Reply 12

username4261124

Like do you have an particulate topics like break even

Reply 13

Cirxxbabz

Original post by candicebetterman

Like do you have an particulate topics like break even

?
I’ll send u the spec

Reply 14

Cirxxbabz

https://qualifications.pearson.com/content/dam/pdf/A%20Level/Business%20Studies/2015/specification-and-sample-assessment-materials/9781446914694_GCE2015_A_BUS_WEB.PDF

Reply 15

username4261124

thanks cool i'll check out and come back to you

Reply 16

username4261124

i have some notes on some of these topics that i could send over- i'll do that tommorow

Reply 17

username4261124

oo actually
check this link out to a revision guide- tutor2u course companion for your spec

https://padlet.com/cpcooke/smaalevelbus

scroll right to the bottom- hope this helps

Reply 18

username4261124

this is what i use even though it isn't my spec- contains so much revision

Reply 19

Cirxxbabz

Original post by candicebetterman

oo actually
check this link out to a revision guide- tutor2u course companion for your spec

https://padlet.com/cpcooke/smaalevelbus

scroll right to the bottom- hope this helps

Oh wow! Thanksssss

You k a great thing ive recently done is follow tutor2u for my subjects
Eg tutor2u business coz it sends useful articles and reminds u of workshops they have (which u pay for)
Lol I haven’t read the articles yet but wenever i have time

It’s more useful folloeing the exam board
Eg I do psychology and so I follow A Level Psychology
That’s v useful but I couldn’t find it for business (my spec)
Maybe there will be for AQA idk

Hope I helped!