500
units to break even
Formula used
Break-even units = Fixed costs / (Price per unit - Variable cost per unit)
The difference (price minus variable cost) is called contribution margin. Price must be above variable cost.
Frequently asked questions
What is the break-even point?
The number of units you must sell so that total revenue exactly covers total costs. Sell one more and you start making a profit.
What is contribution margin?
Price per unit minus variable cost per unit. It is the amount each sale contributes toward covering your fixed costs, then toward profit.
Why does it say I can never break even?
That happens when the price is not higher than the variable cost per unit. Every sale then loses money, so no volume can cover the fixed costs.
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