How To Calculate The Break Even Point And Plot It On A Graph

Contribution Margin= (Selling price / unit - Variable cost / unit)

Break Even Point= Total Fixed Cost / Contribution Margin

X-axis is ’number of units’ and Y-axis is ‘revenue’. The plot of Fixed cost will be a line parallel to X axis and above the X axis. The line of Total cost would start from the point where line of fixed cost meets the Y axis. It would have a positive slope. The line of sales revenues would start from origin (0,0) and move upward with a slope greater than that of the total cost line. The point where these two lines intersect will be the ‘Break Even Point’.