Break-even point

The break-even point is the sales level at which included revenue equals included costs. For one product with a constant selling price and constant variable cost per unit, break-even units = period fixed costs / (selling price per unit - variable cost per unit). The result is units for that period; this calculation assumes positive unit contribution.[1]

Use a consistent basis excluding recoverable VAT and include relevant variable selling costs. Changing product mix or stepped costs requires adapting the simple model. Higher revenue alone does not establish that the calculated break-even point has actually been reached.