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How to use the result
Break-even units equal fixed costs divided by contribution per sale. Contribution is selling price minus variable cost. This simple model assumes the average price and cost remain stable.
- Include payment fees, materials, shipping, commissions, and directly variable labour where appropriate.
- Use an average contribution for mixed products only when the sales mix is realistic.
- Break-even is not the same as enough cash to pay taxes, repay debt, replace equipment, or pay the owner.