The break-even point is the sales level at which total revenue covers the costs included in a specified analysis, leaving neither profit nor loss.
How it works in retail
For a simple single-product model, break-even units equal fixed costs divided by selling price per unit minus variable cost per unit. The denominator is unit contribution.
A retail example
With $3,000 in fixed costs, a $50 selling price and $30 variable cost per unit, the model breaks even at 150 units.
What to keep in mind
The calculation assumes stable prices and costs over the relevant range. Multiple products, changing sales mix and capacity limits require a more detailed model.
Sources & further reading
U.S. Small Business Administration: Break-even calculator
Examples are illustrative. Terminology and measurement conventions can vary by business and market.