A business has fixed costs of £30,000, a selling price of £20 and a variable cost of £8 per unit. Rent then rises by £6,000 while all other figures stay the same. What happens to break-even output?
It falls from 3,000 units to 2,500 units
It stays at 2,500 units because contribution is unchanged
It rises from 1,500 units to 1,800 units
It rises from 2,500 units to 3,000 units
38 exam-style questions on Edexcel GCSE Business 1.3 Putting a business idea into practice, covering 1.3.1a Financial aims and objectives, 1.3.1b Non-financial aims and objectives, 1.3.1c Why aims and objectives differ, 1.3.2a Revenue, costs and profit calculations, 1.3.2b Break even and margin of safety, 1.3.2c Interpretation of break even diagrams, 1.3.3a The importance of cash to a business, 1.3.3b The difference between cash and profit, 1.3.3c Cash-flow forecasts: inflows and outflows, 1.3.3d Cash-flow forecasts: net cash flow and balances, 1.3.4a Short-term sources of finance, and 1.3.4b Long-term sources of finance. Each one has a worked solution and a mark scheme showing where the marks go.