What is the break-even point?

The sales volume where total revenue equals total costs — no profit or loss. Each additional sale beyond it earns profit.

What is contribution margin?

It is the price per unit minus the variable cost per unit — the amount each sale contributes toward covering fixed costs.

Calculate your break-even point in units and revenue.

Fixed Costs

Price per Unit

Variable Cost per Unit

Break-even Units

2,000

Break-even Revenue

$80,000.00

Contribution Margin / Unit

$25.00

The break-even point tells you how much you must sell to cover costs. Here is the formula and how to use it to price products and plan a business.

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