Loading subject…
Break-even quantity
The level of output at which a business's total revenue exactly matches its total costs, resulting in no profit or loss.
Contribution
Contribution is the amount of money left after subtracting variable costs from sales revenue. It helps cover fixed costs and, once those are covered, contributes to profit.
Contribution per unit
Contribution per unit tells you how much each unit sold contributes to covering fixed costs.
Fixed costs
Fixed costs remain constant, regardless of production levels.
Margin of safety
The difference between the actual sales volume and the break-even quantity, indicating how much sales can drop before a business incurs a loss.
Variable costs
Variable costs change in proportion to the level of output.