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It is also important to know how much profit you make per unit as that will help determine your break-even point. You can do this by subtracting the variable costs of production, such as material and labor directly from your revenue. Lastly, divide your fixed costs by your per unit profit margin to obtain your break-even amount – this will indicate how many units need to be sold in order for all associated expenses with that particular project to be covered.
You would require 5000 units to break even, for example if your fixed costs are $50,000 and the profit margin is $10 per unit ($50,000/$10). If you are able to sell above that amount, you will see a positive ROI over time as long as all the other variables stay constant.