Entrepreneurship · lesson 11 of 24 · free

Break-even — Entrepreneurship for kids

Some costs are fixed: a table, a banner or a stall fee costs the same however many items you sell. Each item sold makes a small profit that pays off part of those fixed costs. The break-even number is how many items you must sell to cover them: fixed costs ÷ profit on one. After that, every extra item adds real profit.

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Business tip

Cover the fixed costs — “each item’s profit pays off part of the fixed cost”

  1. A fixed cost is not paid per item (a table, a banner, a stall fee).
  2. Break-even number = fixed costs ÷ profit on one item (profit on one = SP − CP).
  3. Profit after the fixed costs = profit on one × number sold − fixed costs.

Use it for: Deciding if a stall is worth it, how much stock to make and when you start to earn.

Worked example: Aarav pays ₹240 for a table and a banner (fixed costs). Each glass of chai sold makes ₹6 profit. How many must be sold to break even? → 40

  1. Break-even number = fixed costs ÷ profit on one.
  2. 240 ÷ 6 = 40.

Check: Try it: for your idea, write the fixed costs and the profit on one, then find your break-even number ✓

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🏁 Lesson 11 test

20 questions. Check each answer, then go to the next one. Get 16 or more right to pass.

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🖨️ Entrepreneurship Worksheet: Break-Even Point

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