Simplified Breakeven Formula

The simplified breakeven formula helps you determine how much revenue or sales you need to cover all your fixed and variable costs without making a profit or loss. It is calculated by dividing your total fixed costs by the contribution margin per unit (selling price minus variable cost per unit). This tells you the minimum number of units you must sell to "break even." Essentially, it shows the sales level at which your income just covers all expenses, helping you understand when your business becomes financially sustainable.