Formula
break-even units = fixed costs / contribution margin per unit break-even revenue = break-even units × price
Break-even point
The break-even point is the sales volume at which total contribution margin exactly covers fixed costs, so the business makes neither profit nor loss.
Worked example
€24,000 of monthly fixed costs and €75 of contribution margin per unit gives a break-even of 320 units a month.
If variable cost per unit is at or above price, there is no break-even point at any volume: each sale loses money before fixed costs are considered, and selling more makes the loss larger.
Break-even moves every time a fixed cost is added, which is why a figure worked out once in a spreadsheet stops being true within a quarter.
Keep this number live
Plainhub computes break-even point from money you record in plain words, so it is current when you need it rather than the night before a board meeting.
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