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Break Even Analysis. AS Business Studies Produc. Benefits. Shows at a glance break-even output, profit and loss Shows profit or loss made at different output levels Shows output needed to meet profit targets Simple and inexpensive to produce
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Break Even Analysis AS Business Studies Produc
Benefits • Shows at a glance break-even output, profit and loss • Shows profit or loss made at different output levels • Shows output needed to meet profit targets • Simple and inexpensive to produce • Can show impact of changes to price or costs • Can be used to support bank loan applications
Limitations • Assumes all output is sold • Cannot predict effect on demand when price is changed • Costs and prices are not constant over time • Only as accurate as the figures on which it is based