Break-Even Analysis
Find the break-even point: how many units you need to sell to cover fixed costs, given price per unit and variable cost per unit.
Inputs
Rent, salaries, equipment leases — costs that don’t change with sales volume.
Materials, packaging, per-unit labor.
Break-even point
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Contribution per unit
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Break-even revenue
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Contribution margin
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About Break-Even Analysis
How it works
Each unit sold contributes (price − variable cost) toward covering fixed costs. Dividing fixed cost by that contribution gives the number of units required to break even.
Contribution margin
The share of each sale’s price that contributes to fixed costs and profit. Higher margin means fewer sales to break even.
Limitations
Assumes price and per-unit variable cost stay constant. In reality both shift with volume (discounts at high volume, learning-curve cost reductions). Use it as a planning baseline.