Contribution Margin and Break Even Point
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Break-Even Point
Total costs are exactly equal to total revenue.
Contribution Margin Percentage Formula
(Total Contribution Margin ÷ Sales) x 100
Total Costs
Fixed Costs + Variable Costs
Variable Costs
Costs change as the level of activity changes.
Fixed Costs
Costs remain the same as the level of activity changes.
Contribution Margin Per Unit Formula
Selling Price per Unit - Variable Costs per Unit
Contribution Margin Ratio Formula
Total Contribution Margin ÷ Sales
Break Even Point in Units Formula
Total Fixed Costs ÷ Contribution Margin per Unit
Contribution Margin in Dollars Formula
Total Sales Revenue - Total Variable Costs
