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Calculate the variable cost per unit in February for Areej juice if:

fixed costs are 5,550 AED, variable costs are 3,300 AED and the total output is 1,500.

fixed costs are 5,550 AED, variable costs are 3,300 AED and the total output is 1,500.

A

2.2 AED

B

5.8 AED

C

4,955 AED

D

8,325 AED

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What is the break-even point?

A

The total revenue equals (same as) total costs. Profit and loss are the same.

B

It is the number revenue divided by costs. Profit and loss are not the same.

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Why do we use the break-even point?

A

To know how many products to sell to make a profit.

B

To know which method of production to use.

C

To know how much the total costs are.

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How do we calculate the break-even point?

A

1. selling price per unit - variable cost per unit 2. total fixed costs/ contribution per unit

B

1. total revenue/ total fixed costs 2. fixed costs/ average costs

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make a slide that has an activity to practice calculating the contribution per unit

If the selling price per unit = Dh16

The variable cost per bottle = Dh4

Total fixed costs = Dh4,000

How much will the contribution per bottle be?

The variable cost per bottle = Dh4

Total fixed costs = Dh4,000

How much will the contribution per bottle be?

A

12

B

32

C

40

D

64

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If the selling price per unit = Dh16

The variable cost per bottle = Dh4

Total fixed costs = Dh4,000

Contribution Per Unit= Dh12

How much will the break-even point be?

The variable cost per bottle = Dh4

Total fixed costs = Dh4,000

Contribution Per Unit= Dh12

How much will the break-even point be?

A

203

B

230

C

303

D

333

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200

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Why do we use the break-even chart?

A

to show where all the costs are

B

to show where the break-even point is

C

to show the number of output

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