3.3 Costs and break-even analysis

Understand and calculate revenue, fixed costs, variable costs, total costs, profit and loss. Use revenue = selling price × quantity sold, total costs = fixed costs + variable costs, and profit = revenue − total costs in business contexts.

The concept of break-even and calculation of break-even (from formula or diagram):

• break-even level of output.

Interpretation of break-even charts:

• the impact of changes in revenue and costs
• limitations of break-even charts.