Accounting and finance AS level ̣̣̣̣̣̣̣̣̣̣(1)

Break-even chart:a line graph showing total revenue and costs at all possible levels of output or demand, i.e. at every point from an output of zero through to maximum capacity. This enable the reader to see at a glance the profit at any output level that interests them( ̣by looking at the vertical difference between revenue and costs).
The chart comprises three lines:fixed costs, total costs and total revenue.They are plotted with pounds on the vertical axis and output on the horizontal axis.
Fixed costs: form a horizontal straight line
Total costs:line starts at fixed costs and rises as a diagonal straight line
Total revenue: line start at đ and rises as a diagonal straight line
To construct the chart, first set out a grid with the following headings:
Quantity
Revenue
Variable costs
Fixed costs
Total costs
In the quantity column should be no more than three figures:

1. 0 units
2. Maximum output ̣̣̣̣̣̣̣̣̣̣̣̣̣̣̣̣(which might have to be assumed)
   
3. A convenient point between them( probably halfway)

Break -event point:the intersection of total revenue and total cost on a break-even chart.It can be calculated without drawing the chart as shown below:
Formula:
Break-even output=fixed costs: contribution per unit
selling price-variable cost