Churchill Mews Incorporated provides a single service. The business results for the past two months are as follows:

	Dec-14	Jan-15
Sales(units of the service)	4,000	4,960
Sales Revenue (US$)	200,000	248,000
Operating profit (US$)	80,000	118,400

There were no changes, of any description, in selling prices or costs over the two months.

Required:

a) What is the break-even point for the business activities?

b) In your own words, define the term"Break-Even Point"

c) How is the Break-Even Point (BEP) calculated?

d) In your own words, explain why the Break-Even Point (BEP) tends to be useful.

Answer rating: 100% (QA)

a For the Business activities Breakeven point is that point of sales at which the total sales is sufficient to cover the total cost to the business b ... View the full answer