Break-Even Point Formula (Contribution Margin)

Total fixed costs (including capital expenditures) divided by per-unit contribution gives the break-even units. The follow-on question: can the expected market absorb that volume — i.e., is the project viable?

The formula

BEQ = TFC / CM

How many units must be sold to cover all fixed costs and COGS, expressed via contribution margin.

What goes into it

Total Fixed Costs (TFC, including capital expenditures)
Contribution Margin per unit (CM)

Worked example

Total fixed costs (TFC)	$250,000
Contribution margin (CM)	$60
Break-even (BEQ)	≈ 4,167 units

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