Operations and break-even decisions
| English | 中文 | Pinyin |
|---|---|---|
| contribution/ˌkɒntrɪˈbjuːʃn/ | 边际贡献 | biān jì gòng xiàn |
| margin of safety/ˈmɑːdʒɪn ɒv ˈseɪfti/ | 安全边际 | ān quán biān jì |
A decision you can investigate
- A workshop considers a machine with higher fixed cost and lower variable cost.
- The best choice depends on demand and the risks of unused capacity.
Build the explanation
- Operations transform inputs into outputs. Job, batch and flow production suit different volumes and levels of customization.
- Break-even output equals fixed cost divided by contribution 边际贡献 per unit when the simplifying assumptions hold.
Match the terms to their precise meanings.
Use these definitions in the particular context of Operations and break-even decisions.
Work through the evidence
- Fixed cost is 6,000, selling price is 50 and variable cost per unit is 30. Contribution = 50 − 30 = 20.
- Break-even output = 6,000/20 = 300 units. At 400 units, margin of safety 安全边际 = 400 − 300 = 100 units.
How many units must be sold to break even in this model?
Fixed cost is 6,000, selling price is 50 and variable cost per unit is 30. Contribution = 50 − 30 = 20. Break-even output = 6,000/20 = 300 units. At 400 units, margin of safety = 400 − 300 = 100 units.
Which caution belongs to this particular task?
Break-even assumes stable unit prices and costs and that output is sold. It does not prove demand exists. HL adds lean quality, planning, contingency, R&D and information systems; evaluation must connect these to context.
The explanation in this lesson makes a conditional claim; relevant context and evidence still matter.
HL adds lean quality, planning, contingency, R&D and information systems; evaluation must connect these to context.
Test the limits
- Break-even assumes stable unit prices and costs and that output is sold. It does not prove demand exists.
- HL adds lean quality, planning, contingency, R&D and information systems; evaluation must connect these to context.
Choose the two statements supported by this lesson.
The concept and worked evidence support these claims; the stated limits rule out the universal shortcut.
Apply and explain your answer
- How many units must be sold to break even in this model?
- 300 units.
Use the terms precisely
- contribution: Selling price per unit minus variable cost per unit.
- margin of safety: Actual or forecast output above break-even output.
Fixed cost is 6,000, selling price is 50 and variable cost per unit is 30. Contribution = 50 − 30 = 20. Break-even output = 6,000/20 = 300 units. At 400 units, margin of safety = 400 − 300 = 100 units.
Break-even assumes stable unit prices and costs and that output is sold. It does not prove demand exists. HL adds lean quality, planning, contingency, R&D and information systems; evaluation must connect these to context.
Operations transform inputs into outputs. Job, batch and flow production suit different volumes and levels of customization.