How to read a break-even chart
Output runs along the bottom and money up the side. Fixed costs are the flat line, total costs start at the fixed costs and rise, and total revenue starts at zero. Where revenue crosses total costs is break-even: read down for the output and across for the revenue. Margin of safety is the gap between actual output and break-even output.
Pick your course first. AQA GCSE sets only read charts, as the AQA specification says students will not draw them or use the formula. OCR GCSE reads charts and works out break-even quantity, with no margin of safety, as its specification lists. The other courses add the formula, what-if changes and, for A level and Cambridge, a grid to draw your own chart. ACCA adds profit-volume charts; SA Maths Lit uses income and total cost graphs and tables of values.
Example: break-even by formula
In set BE3C24 (A level), phone cases sell for £8.00, the variable cost is £3.00 and fixed costs are £2,600 a month. Contribution is £8.00 − £3.00 = £5.00, so break-even is £2,600 ÷ £5.00 = 520 cases, worth 520 × £8.00 = £4,160. At 880 cases the margin of safety is 880 − 520 = 360 cases. Open set BE3C24
Margin of safety on each course
| Course | Asked as |
|---|---|
| AQA GCSE | units: actual output − break-even output, read from a chart |
| Edexcel GCSE | units: actual or budgeted sales − break-even sales |
| OCR GCSE | not in the specification, which lists break-even quantity only |
| A level, Cambridge | units, or money when asked (units × price) |
| ACCA | units, money, or % of budgeted sales |
| SA Maths Lit | not used; the break-even point is two values, the number sold and the rand |
Questions
How do you find the break-even point on a chart?
Find where the total revenue line crosses the total costs line. Go straight down from that point to read the break-even output, and straight across to read the break-even revenue. To the left of it the business makes a loss; to the right it makes a profit.
How do you calculate break-even?
Work out the contribution per unit first: selling price minus variable cost per unit. Then divide the fixed costs by it. With a price of £8, a variable cost of £3 and fixed costs of £2,600, contribution is £5 and break-even is 2,600 ÷ 5 = 520 units.
Is margin of safety in units, money or a percentage?
All three are used. GCSE mark schemes want units: actual output minus break-even output. A level and Cambridge sometimes ask for it in money (units × price). ACCA also uses a percentage of budgeted sales. Every sheet here states the form it wants, and each question names its unit.
How do you draw a break-even chart?
Put output across and money up. Fixed costs are a flat line. Total costs start at the fixed costs on the money axis and rise by the variable cost per unit. Total revenue starts at zero and rises by the price. Work out each line at zero and at the most it can make, plot the two points and join them with a ruler.
What happens to break-even if the price goes up?
The total revenue line gets steeper, so it crosses total costs sooner and break-even output falls. Higher variable costs make the total costs line steeper and raise break-even. Higher fixed costs lift both cost lines and raise break-even too.
What is a profit-volume chart?
It shows one line: profit or loss against sales. At zero sales the loss equals the fixed costs, and the line crosses zero at break-even. Its slope is the contribution to sales (C/S) ratio. It is used in management accounting, for example ACCA Performance Management.
Can I give my class the same questions?
Yes. Share with class copies a link with the set code, and everyone who opens it gets the same charts and numbers. To stop copying, print a class set: each copy asks the same kinds of question in the same order with different businesses and numbers, and each has its own key.
Conventions checked October 27, 2026 in: AQA GCSE Business 8132 specification and the November 2020 paper 2 mark scheme; AQA A-level Business 7132; Pearson Edexcel GCSE Business 1BS0 and A level 9BS0; OCR GCSE J204 specification and teachers' guide and OCR A Level H436 formulae; Cambridge 9609 syllabus 2026 to 2028 and IGCSE 0450 2026; the ACCA Performance Management study guide, September 2026 to June 2027 and ACCA's cost-volume-profit analysis article; the CAPS Mathematical Literacy Grades 10 to 12.