Page 7 - BE Theory Note

When the total costs line is above the sales revenue (and to the left of the

breakeven point) then the business will be making a loss

Example – How much loss will the business make if it sells 100 units? Looking at the
Sales Revenue line, the value is £10,000. When looking at the Total Costs line the

value is £15,000

Profit = Sales Revenue –
Total Costs
£10,000 - £15,000 =

-£5,000 loss

Using a formula;

Loss at 100 units =
Expected units – breakeven units x contribution

(100 – 200) x £50 =
-£5,000 loss

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