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How to calculate the break-even point for your business? This break-even analysis video explains the break-even point in words, in graphs, and in formulas, and encourages you to take various actions in your business to improve profitability. A common definition of the break-even point is the sales volume where neither profit nor loss is made. An alternative way of saying the same thing: the break-even point is the sales volume where Contribution Margin $ equals Fixed Cost $. Lets look at the break-even point on a graph. On the horizontal axis the number of units sold, on the vertical axis the total dollars. Contribution Margin $ go up for every unit sold. Contribution Margin is revenue minus variable cost, what you sell the product for minus what it costs you to make an incremental unit. Fixed costs dont vary with the number of units sold. Typical examples of fixed cost are rent, depreciation, and research and development expenditures. The break-even point is right here, where the t