Calculating a
break-even point
Aim: How to get an A grade
in written answers
for BE
Lesson Objective:
To identify your strengths and weakness in answering exam questions.
- Understand break even concept and contribution and how to communicate
this in an exam answer.
- Identify the key techniques needed to complete an analysis Of the break
even and contribution concept through case
- Evaluate the use of break even analysis and contribution
Homework in: THE DOME Worksheet
Homework Out: Worksheet 3.1
1
Recap: Keywords
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Define:
Start up costs
Running Costs
Fixed cost
Variable cost
Revenue
Contribution
2
Identifying the break-even point
Cost/Revenue £
Tom's ice creams
450
400
350
300
250
200
150
100
50
0
Profit
Sales Revenue
Total Cost
Fixed Cost
Loss
Break-even point
0
100
200
300
Number sold
3
Formula for Break even
4
Get an A – Snakes and Ladders style
A
Grade
Evaluation
(Make a judgement/
recommendation)
Analysis (effect on Business –
Adv and dis adv)
Application (apply to case study)
Content: Knowledge and Understanding
(define)
5
Get an A – Snakes and Ladders style
GCE Business
Max you could get
Evaluation
Analysis
Application
Content/Knowledge
9 – 16 marks
7 – 8 marks
4 - 6 marks
1 - 3 marks
6
5 things that failed me…
1.
2.
3.
4.
5.
I didn’t read the question
I didn’t understand the question
I misunderstood the question
I answered in bullet points
I didn’t relate the answer to the
case study.
7
5 things that stopped me from getting
an ‘A’…
1.
2.
3.
4.
5.
I didn’t develop my answer (how and why –
analysis)
I didn’t make judgements (persuade – with
evidence – evaluate)
I didn’t manage my time effectively (save time
for the BIG questions, don’t waste time on 2 – 3
mark questions)
I didn’t know how to work out or use ratios in
the finance questions.
I didn’t use business language
bust?
stuff?
DO NOT say money/ people – ruins your impression of an A student!
Money – say profit or cash,
People - Say employees/customers/shareholders….
-
8
What is the Breakeven point?
Define…….
Do use the term in your
answer as it helps you to
focus…..
In a question HIGHLIGHT key words and any answers.
It is QUALITY not Quantity.
9
Application
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Apply your answer in context.
Not just mentioning XYZ to every second
sentence.
Pick up aspects of the business.
Pick up KEY business aspects
In CONTEXT, then develop your answer.
Relate to the features of the business
Distinct features of the
INDUSTRY/MARKET.
10
The Dome - Application
11
Analysis
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Logical, developed thoughts/
arguments
Using relevant theory correctly
Clear focus on the question set
Clear sense of CAUSE and EFFECT.
How and Why
Advantages and disadvantages
What happens if…. (develop
answer)
12
DEPTH
Evaluation
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Opinion - passionate, unsupported
Argument – dispassionate and
supported
Evaluate: Arguments are opinions
which are supported by evidence
(give a reason)
13
When evaluating a point:
PROS
 Make judgment
 Advice
 Argue the case
CONS
 Discus
 Consider
 Implementation
 Assess
14
Evaluate
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Show two examples…
Opinion/ argument
Because…. Therefore….
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Show you KNOW what you
are talking about (context)
The analysis
In context
(application)
LINK
Make Recommendations
16
Magic Formula
When walking into the exam remember to always argue
COSTS
BENEFITS
Should we?
Or
Shouldn’t we???
17
Success Factors… what do you think you
may have done right in your homework and what do
you need to develop?
18
Lets find out!!!
19
1. What is mean by Breakeven? (2)
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Answers may include: When the level of
input equals the level of output.
C2 Ap 3 An3
Content
2 marks Good understanding
1 mark Some understanding
0 marks No relevant content points made.
20
2. Two actions to take to reach the
original target of 12 million
customers per year.(6)
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Answers may include: increase promotion to boost sales
(two for one); Increase advertising; better public
relations.
C2 Ap 2 An2
Content
2 marks Two or more points made and explained
1 mark Relevant content made but not developed or one
point made and explained
0 marks No relevant content points made.
Application
2 marks Points effectively applied to the case
1 mark An attempt to apply knowledge to the case
0 marks No attempt at application
Analysis
2 marks Good analysis of issues
1 mark Limited analysis of issues
0 marks No analysis of issues demonstrated
C□Ap□An□
21
2. Examine two ways to reduce the
breakeven point.(8)
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Answers may include: Cut costs (fixed/variable) - but must consider
effect on quality
Increase selling price – but consider effect on sales!
C2 An3 En3
Content
2 marks Two or more points made and explained
1 mark Relevant content made but not developed or one point made
and explained
0 marks No relevant content points made.
Analysis
3 marks Good analysis of issues
2 – 1 mark Limited analysis of issues
0 marks No analysis of issues demonstrated
Evaluate
3 marks Good judgement of relevant issues
2-1 marks Limited judgement shown of relevant issues
0 marks No judgement of relevant issues.
C□An□E□
22
3. Discus the limitations of using
Breakeven analysis (12)
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Answers may include: simplistic e.g all units sold at one price); data may be out of
date/ assumes what is made is sold; does not take into account competition e.g price
cut; doesn’t consider economy of scale; prices always changing (won’t stay valid for
long);accuracy of data.
C2 Ap 2 An4 E 4
Content
2 marks Two or more points made and explained
1 mark Relevant content made but not developed or one point made and explained
0 marks No relevant content points made.
Application
2 marks Points effectively applied to the case
1 mark An attempt to apply knowledge to the case
0 marks No attempt at application
Analysis
4 – 3 marks Good analysis of issues
2 – 1 mark Limited analysis of issues
0 marks No analysis of issues demonstrated
Evaluate
4 - 3 marks Good judgement of relevant issues
2-1 marks Limited judgement shown of relevant issues
0 marks No judgement of relevant issues.
C□Ap□An□E□
23
What do you
need to improve?
24
Calculating a
break-even point
Aim: How to get an A grade
in written answers
Lesson Objective:
To identify your strengths and weakness in answering exam questions.
- Understand break even concept and contribution and how to communicate
this in an exam answer (content and application).
- Identify the key techniques needed to complete an analysis Of the break
even and contribution concept through case
- Evaluate the use of break even analysis and contribution
Homework Out: Worksheet 3.1
25
Tips to revision:
You retain:
 5% Listen
 10% Read
 25% Listen and See
 30% demonstration
 50% Discus
 75% Do
 90% Teach someone else
26
Tips to revision:
You retain:
 5% Listen
 10% Read
 25% Listen and
See
 30%
demonstration
 50% Discus
 75% Do
 90% Teach
someone else
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Work on exercises
Glossary in hand
Don’t revise too
late!
Homework
regularly
Business
Vocabulary
Apply subject
knowledge to
business
27
situations.
Tips to revision:
You retain:
 5% Listen
 10% Read
 25% Listen and
See
 30%
demonstration
 50% Discus
 75% Do
 90% Teach
someone else
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Revise terms
regularly
Magic formula
Read Business
notes at home
Devise a revision
plan.
28
Revision:
Create a list of what you need to learn
A4 Sheet for each topic:
 Bring it down to bullet points for each
topic.
 Practice papers, mock exams
 Write bullet points for each answer
 Mind map of topics (highlight off what you
still need to revise).
 Create a spider diagram as your answer
(include application).
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29
5 things to avoid….
1.
2.
3.
4.
5.
Jumping around – no planning Plan your answers know your
argument
Repetitive
I think… I think… (no theory, no
reasoning, no answer)
No context
Leave enough time (don’t rush at
the end).
30
Report
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Doctor, Doctor
You have a whole lot of symptoms
TELL WHAT TO DO NEXT…
The report is recommendations
You are the business doctor.
Analysis – Say what to do next.
Recommendation
important!
This is
31
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Know the advantages and
disadvantages of EVERYTHING on
the spec!
32
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Make sure you read and study the data
before you tackle the questions
You’ll rarely find that a question is onesided in outcome, so always give both
balanced answers/conclusions
Keep referring back to the question for
information you may need to extract a
comment on it in your answer
Don’t spend over long on one question!
33
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Marks aren’t for spelling/grammar. They
are for business terminology!
Study Key terms!
Be careful with accounting terms – profit
and cash are different!
Make your answer clear, easy to read and
concise.
Check calculations and your answer in
units.
34
Avoid the flaws of a weak candidate
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Don’t repeat the data
Don’t just analyse
Highlight main words in the case
study
Give data in context.
35
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Focus on an issue – say what it
means
Link data – anayse to something
else
Don’t have to stick to one area
Don’t just repeat data say what it
MEANS!!!
36
Structure:
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Answer a question:
Strength
Weakness
 Recommendations
37