Every sale contributes its price less its variable cost toward the fixed costs. Once those are covered, the contribution is profit.
- Contribution per unit = price - variable cost.
- Contribution margin ratio = contribution / price.
- Break-even units = fixed costs / contribution per unit; break-even revenue = fixed costs / the ratio.
- Units for a target profit = (fixed costs + target) / contribution. You can't sell part of a lamp, so round up with ROUNDUP.
- Margin of safety = how far expected sales could fall before a loss, as a share of expected sales.
With several products sharing fixed costs, use a weighted contribution, =SUMPRODUCT(mix, contribution), then split the break-even total by the mix.
If the contribution is zero or negative, every extra sale loses money and there's no break-even at all: trap it with IF before dividing.