Monthly break-even
A simple per-month model. Real businesses have stepped and mixed costs, so treat this as a guide.
Sell past break-evenFrequently asked questions
What is the break-even point?
The break-even point is the sales volume at which your total revenue exactly covers your total costs, giving you neither a profit nor a loss. Every unit sold above that point contributes directly to profit. Knowing your break-even gives you a minimum target and helps you assess whether a business model, product or pricing is viable.
How do you calculate break-even?
Divide your fixed costs by the contribution per unit, which is the selling price minus the variable cost per unit. The result is the number of units you need to sell to cover all costs. Multiply by your selling price to find the break-even revenue. The calculation assumes your costs and price stay constant, which is a simplification for most real businesses.
What is contribution margin?
Contribution margin is the portion of each sale that remains after deducting variable costs. It contributes first to covering your fixed costs and then, once you are past break-even, to profit. A high contribution margin means each sale does more work. A low contribution margin means you need more volume to cover overheads, which makes the business more sensitive to revenue fluctuations.
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