Activity Overview
In this activity, students perform breakeven analysis using the cost and revenue of an enterprise. They will determine the relationship between fixed and variable costs, profits, pricing policy, and the volume of output.
Before the Activity
See the attached PDF file for detailed instructions for this activity
Print pages 35 - 38 from the attached PDF file for your class
During the Activity
Distribute the pages to the class.
Follow the Activity procedures:
Calculate the quantity of an article to be sold in order to breakeven (revenue = cost), based on the fixed cost, variable cost per unit, and unit price
Prepare a graph of revenue versus cost, find the breakeven point, shade the regions representing profit and the regions representing loss
Prepare a table displaying number of items, revenue, and cost and indicate where breakeven occurs
After the Activity
Review student results:
As a class, discuss questions that appeared to be more challenging
Re-teach concepts as necessary