How break-even is calculated
Contribution per unit = selling price − variable cost. Break-even units = fixed costs ÷ contribution per unit. Break-even revenue = break-even units × selling price.
Example: with ₹1,00,000 fixed costs, a ₹500 price and ₹300 variable cost, you earn ₹200 per unit. You need ₹1,00,000 ÷ ₹200 = 500 units a month to break even, or ₹2,50,000 in sales.
How to lower your break-even point
Raise the price, cut variable costs, or reduce fixed costs. Even a small price increase can reduce the number of units you need to sell, which is why discounting is risky.