Plot total revenue and total cost against units sold, find the break-even point, and see the loss and profit regions shaded on either side of it.
Total Revenue = price × units sold. Total Cost = fixed costs + (variable cost per unit × units). Break-even units = fixed costs ÷ (price − variable cost per unit) — the point where the two straight lines cross, so revenue exactly equals total cost and profit is zero.
Contribution margin per unit = price − variable cost per unit — the amount each additional unit sold contributes toward covering fixed costs before any profit is made. Once enough units are sold to cover fixed costs entirely, every further unit's contribution margin becomes pure profit.
Margin of safety = (actual units sold − break-even units) ÷ actual units sold, expressed as a percentage. It measures how far current sales sit above the break-even point — a high margin of safety means sales could fall a long way before the business starts making a loss; a low or negative one means it is operating close to, or below, break-even.
This simulation plots the two lines every break-even chart is built on: total revenue (price × units, a line through the origin) and total cost (fixed costs plus variable cost per unit × units, a line starting above zero). Where they cross is the break-even point — sell fewer units and you are in the shaded loss region, sell more and you are in the shaded profit region.
A revenue line (blue) rising from the origin and a cost line (orange) starting at the fixed-cost level, with the region between them shaded red where cost exceeds revenue (loss) and green where revenue exceeds cost (profit), plus a pulsing marker exactly at their intersection — the break-even point.
Set fixed costs, price per unit and variable cost per unit to match a real product, adjust the chart's unit range to zoom in or out, and drag the units-sold slider to see your current margin of safety — how far current sales sit above or below the break-even point.
If variable cost per unit ever equals or exceeds the price, the cost line is steeper than or parallel to the revenue line and the two never cross in a profitable direction — no volume of sales can break even, which is exactly what happens if you drag Variable cost/unit above Price per unit here.
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). That denominator is the contribution margin — the amount each unit contributes toward fixed costs — so dividing fixed costs by it gives exactly how many units are needed before revenue equals total cost.
Contribution margin per unit = price − variable cost per unit. It's the portion of each sale left over after covering that unit's variable cost, and it goes first toward paying off fixed costs and, beyond break-even, straight to profit.
Margin of safety = (units sold − break-even units) ÷ units sold, as a percentage. A margin of safety of 40% means sales could fall by 40% before the business would drop back to break-even — a simple way to gauge how much of a buffer current sales provide against a downturn.
This model assumes variable cost per unit stays constant regardless of volume — a simplifying assumption that holds reasonably well over a limited output range. In reality, economies of scale can bend the cost line down at higher volumes, or capacity constraints can bend it up, but the straight-line model is the standard introductory break-even analysis.
Yes — if variable cost per unit is greater than or equal to the selling price, the contribution margin is zero or negative, so no number of units sold will ever cover fixed costs. Every additional unit sold either adds nothing to covering fixed costs or actively deepens the loss.