Break-even

Contribution margin as a share of the price.

Same leftover after variable cost, shown as a percent of price. Handy when you think “we keep 40% after variable” before you run unit break-even.

Break-even sales ≈ fixed costs ÷ (CM ratio). When the ratio is thin, you need a lot of volume — or a better price.

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Price per unit

What you charge

Variable cost

Cost per unit sold

CM% = (price − variable) ÷ price

CM ratio60.0%

Contribution / unit$24.00

Variable share of price40.0%

Estimates only — not tax or accounting advice. Double-check before you print price tags.

Not the same as profit margin. Profit margin subtracts all costs; contribution margin only pulls variable cost off the ticket.

CM ratio = (price − variable) ÷ price × 100

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