Put it into practice.
A $30 sale with $18 of variable cost contributes $12. If fixed costs are $1,200, break-even requires 100 units, assuming the price and variable cost stay constant.
A common mistake
Revenue is not profit, and contribution margin is not net income. Check whether freight, commissions, returns, and other variable costs have been included.
Original independent study explanation. Revised October 2026. Practice assumptions are illustrative.