Break even formulae

Formulae

Sales – variable costs = contribution (note: can be in total or per unit)

Total contribution – fixed costs = profit

Break even in units = Fixed costs

Contribution per unit

Contribution margin ratio = Contribution x 100

(also known as C/S ratio) Sales

Units sold for target profit = Fixed costs + Target profit

Contribution per unit

Margin of safety in units = Expected sales in units – Break even sales in units

Margin of safety as a % = Expected sales in units – Break even sales in units x 100
Expected sales in units