Business Management · Unit 5: Operations management

5.5 — Break-even analysis

Business Management · SL / HL · syllabus-mapped notes

1. Contribution

   Contribution per unit = selling price − variable cost per unit. Total contribution = contribution per unit × units sold.

2. The break-even chart

3. Changes and limitations

   Changes in price or costs shift the break-even point. Break-even assumes all output is sold and costs are linear, so it is a simplification.