Breakeven | Contribution | A-Level, IB & BTEC Business

In this video on breakeven analysis, Jim explained the key concept of contribution and how it can be used to calculate the breakeven output.

#alevelbusiness #tutor2ubusiness

VIDEO TIMESTAMPS
00:00 - Introduction to breakeven analysis and the concept of contribution
00:31 - Illustrating the concept of contribution using the example of selling hoverboards
01:43 - Exploring contribution in more detail and how it covers fixed costs and leads to profit
02:19 - Calculation of total contribution and understanding its relationship with fixed costs
03:59 - Explanation of contribution per unit and its significance in calculating break-even level
05:16 - Example calculation of contribution per unit and total contribution using product X
07:00 - Determining profit based on contribution and fixed costs
07:33 - Explanation of break-even output and its formula using fixed costs and contribution per unit
08:41 - Calculation of break-even output using the given example
09:13 - Recap of the concepts of total contribution, contribution per unit, and break-even output

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[ramu]

Wait, that's it ? It's so easy..
I didn't understand this in class today. Thank you, sir.
May God bless you and your family.

[panostsak]

Thank you, it "clicked" now and I understand the concept. This is taught in such a confusing way and no one is explaining that "Contribution" is essentially contributing the money you make to cover fixed costs before considering profit.

[adobbyns]

Wow! I’ve struggled with most of the concepts in the text book! These videos have really helped me understand things I feared I never would!! Thank you!

[conormcgowan]

God bless you. I have a better understanding of this for my forthcoming exam.

[maleehakhan]

Thank you much!! I have been struggling with this chapter!! It's so difficult

[gemma]

Contribution = SP-VC. BEP(units)=fc divide by C BEP(sales revenue) = bep(units)x SP. MOS= SU - BE. Profit = MOSxC. Profit if X =MOSxC. Profit/loss =Limit -BEPxC

[athar]

i liked the very start especially. Of course, my instinctive answer was if ur selling price is greater than your cost then yes - you make a profit. So it was a bit of a slap in the face when you came back and said NO. And then explained that the difference was actually contributing towards paying off the fixed costs and only once that is achieved can you then enjoy the profit.

[ravikumartantry]

U made it very simple n crisp ... was struggling to understand u made it so easy thank u

[andily]

Thank you so much, wishing you all the best in life

[Linakaciulis]

Thank you so much ☺️ why my tutors can’t explain it this way is beyond me, you have saved me today, sir ! Thank you

[ranaamna]

Now I understood why is contribution per unit constant,
Thank you sir

[jyotirmoyroy]

you saved my semester, god bless, Thanks a lot sir

[Dr.Aniket.Sharma]

wow. it was a great explanation. thanks a lot 🤗

[cottondai]

Great lesson clear explanation. Thank you.

[countdracula]

Thank you so much this helped to clear the concepts alott ✨

[abdulhasan]

Hello, in regard to fixed costs, when it comes to calculating the breakeven point of a new product being added to an existing range of products, do I take into consideration only the new fixed costs that will arise as a result of adding the new product to the range? And should I take their annual value? Thanks

[haydngilchrist]

contribution per unit also works out the same if you do contribution divided by units sold, hence why its called contribution per unit

[je]

Thank you so much really helped me!
I’ve got a business test on finance tomorrow, will let you know how I get on!

[omarm]

Very clear concise information well explained.