🎯Cost-Volume-Profit (CVP) Analysis
Break-Even Point in Sales Dollars
Fixed Costs ÷ Contribution Margin Ratio = Break-Even Sales $
What It Means
Revenue needed to cover all costs.
Example
Fixed Costs:$100,000
CM Ratio:40% (0.40)
$100,000 ÷ 0.40
Break-Even = $250,000 in sales
Related Formulas
Contribution Margin per Unit
Sales Price per Unit - Variable Cost per Unit = Contribution Margin per Unit
Contribution Margin Ratio
Contribution Margin ÷ Sales × 100 = CM Ratio %
Break-Even Point in Units
Fixed Costs ÷ Contribution Margin per Unit = Break-Even Units
Target Profit (Units)
(Fixed Costs + Target Profit) ÷ Contribution Margin per Unit = Units Needed
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