Unrealistic assumptions – products are not sold at the same price at different levels of output; fixed costs do vary when output changes
Sales are unlikely to be the same as output – there may be some build up of stocks or wasted output too.
Variable costs do not always stay the same. For example, as output rises, the business may benefit from being able to buy inputs at lower prices (buying power), which would reduce variable cost per unit.
Most businesses sell more than one product, so break-even for the business becomes harder to calculate
Break-even analysis should be seen as a planning aid rather than a decision-making tool

	Created by cesleviciutek over 8 years ago

GCSE Business studies Slide Set on Finance- Break even, created by cesleviciutek on 22/03/2016.

Finance- Break even