What are fixed costs vs variable costs?

Fixed costs (rent, salaries) don't change with production. Variable costs (materials, shipping) scale with units produced. Contribution margin = Price − Variable cost.

What happens after break-even?

Every unit sold beyond break-even contributes its full contribution margin to profit (before taxes). This is where profitability accelerates.

How do I lower my break-even point?

Reduce fixed costs, raise selling price, or lower variable costs. Even small improvements multiply across all units sold.

Financial

Break-Even Calculator

Fixed Costs ($)

Selling Price per Unit ($)

Variable Cost per Unit ($)

The break-even point is where total revenue equals total costs — no profit, no loss. Below break-even, the business loses money; above it, every unit sold contributes to profit.

Symbol	Name	Unit	Description
Q	Break-Even Quantity	units	—
F	Fixed Costs	$	—
P	Unit Selling Price	$/unit	—

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Pro Tip

Increasing price by 10% often has a bigger effect on break-even than cutting variable costs by 10% — price sensitivity matters.

References

›Investopedia — Break-Even Analysis

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