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Ops Console / Module 06 / Break-even
Know the number you must sell to win.
Below break-even, every sale deepens the hole; above it, every sale builds profit. This tool finds that exact point from your fixed costs, price, and variable cost, and shows how many more units it takes to hit a profit target you set.
The volume at which sales cover all costs. Below it you lose money; above it, each unit adds profit equal to its contribution margin.
For a new product, a price change, or a piece of equipment with a monthly cost. It tells you how much you must sell just to stand still.
Enter your fixed costs, the price, and the variable cost per unit. Add a profit target to see the volume needed to reach it.
Contribution margin = price - variable cost. Break-even units = fixed costs / contribution. Units for target = (fixed + target) / contribution, rounded up.
Fixed costs run $4,000 a month. Signs sell for $25 and cost $10 in materials, so each contributes $15. You break even at 267 signs, about $6,667 in sales. To clear a $3,000 profit you need 467 signs. Now the monthly target is a number, not a vibe.
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