The sales volume where revenue exactly covers total costs.
Below break-even every sale loses money overall; above it, each sale’s contribution margin is profit. Knowing the number turns pricing and cost decisions from vibes into math.
Formula: BE Units = Fixed Costs ÷ (Price − Variable Cost)
Example: $25,000 fixed costs ÷ ($80 price − $35 variable) = 556 units/month.
FAQ
What is Break-Even Point in simple terms?
Below break-even every sale loses money overall; above it, each sale’s contribution margin is profit. Knowing the number turns pricing and cost decisions from vibes into math.
How is it calculated?
BE Units = Fixed Costs ÷ (Price − Variable Cost). Example: $25,000 fixed costs ÷ ($80 price − $35 variable) = 556 units/month.