Differentiate between break-even income calculations.
submitted by Acklas

sammy

Break-even calculations are all about figuring out how much money a company needs to make to cover its costs. That means no profit or loss. You can do it using fixed costs divided by the contribution margin, which shows how much each unit sold contributes to covering fixed costs.

bryan

It's usually calculated by dividing fixed costs by the contribution margin ratio (contribution margin per unit / selling price per unit). Essentially, it tells a business how much they need to sell to cover all expenses.