Break-Even Point

Definition

The sales level where total revenue exactly equals total costs—meaning you're not making or losing money. Formula: Fixed Costs ÷ Contribution Margin per Unit. It's the minimum you must sell to keep the lights on.

Related Terms

Contribution Margin

Sales revenue minus variable costs. It's the amount each unit contributes toward covering fixed costs and generating profit. Formula: Contribution Margin = Sales − Variable Costs.

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