The equation or formula of contribution margin can be written as follows. Break Even Analysis formula helps to increase profitability by reducing the number of unit of product which needs to be produced using Beak Even point formula. How To Calculate Your Business S Break Even Point Video Included Marketing Budget Contribution Margin Data Driven Marketing The main thing to understand in managerial accounting is the difference between revenues and profits. . Once your sales equal your fixed and variable costs you have reached the break-even point and the company will report a net profit or loss of 0. The break-even point in the above graph is 2000 units or 30000 that agrees with the break-even point computed using equation and contribution margin methods above. After completing a break-even analysis you know exactly how much you need to sell to be profitable. To calculate the break-even point in units use the formula. Pete ...