Break even Point Formula

We can arrive at the break even point using a mathematical model as shown below:

Then we have,

         Sales Revenue - Total Cost    =  Profit
             So,    sQ - [vQ + F]          =  P
             So,    (s - v) Q - F           =  P

We can use this equation to find the quantity Q_B of units to be manufactured and sold in order to break even.

Note that at the break even point profit i.e., P = 0

So the above equation becomes,

Since  s - v  = Unit contribution

We have the formula,

We may be interested in the Break Even Sales value instead of the Break Even Sales quantity.

The above can be written as:

or 

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