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Break-even asks how many sales cover the basics
Break-even occurs when total revenue equals total costs.
The idea
In a simple single-product model, fixed costs divided by contribution per unit gives the units needed to break even.
An example
With fixed costs of €100 and €5 contribution per sale, 20 sales cover those fixed costs.
Put it into practice
Check the assumptions behind the calculation.
Further reading: OpenStax · Entrepreneurship ↗
Test yourself: How many sales cover €100 fixed costs at €5 contribution each?
20
100 divided by 5 equals 20, under the stated assumptions.
Explanation and illustrative examples by One Card Wiser. Source linked for further reading.
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