Professional Documents
Culture Documents
3 3a Activity Costs and Revenues
3 3a Activity Costs and Revenues
Read the case study information below and answer the questions that follow.
1. Calculate all missing values in the table to confirm that the break-even level of output is
indeed 500 burgers. [6 marks]
2. Construct a fully-labelled break-even graph from the information given, to again confirm
the break-even level of output. [8 marks]
3. Identify on the break-even graph the margin of safety and profit at The van Boheemen’s
full operating capacity – 700 burgers a day. [4 marks]
Ms.Heba Ibrahim
Business Teacher - IBDP/IGCSE
AMA International School Bahrain
hkafrawy@amais.edu.bh
Break-Even Graph for Boheemen's
12
10
8
TC, TR, FC ($)
0
0 1 2 3 4 5 6 7 8 9 10
Output ($)
The break-even point is where the Total costs = Total revenue in the graph (where the lines meet) which is
at the point (0, 1000)
Q3) from the break even graph we can conclude the margin of safety, and since boheemen’s made
200$ in profit by selling 700 burgers, the margin of safety is 200 units (above the break even point)