CVP Break-Even & Leverage
A cost–volume–profit model from contribution margin to break-even.
It measures break-even units and dollars, margin of safety, and operating leverage.
Use it to see how much volume cushion you have before profit turns negative.
Signal Lab · Model
CVP Break-Even & Leverage
CVP (Cost–Volume–Profit) — contribution margin → break-even units and dollars → margin of safety and operating leverage. See what 1% volume does to profit.
Illustrative AU product / manufacturing sample until you enter actuals. Not financial advice.
Price, variable cost, fixed costs, and volume
Single-product CVP (Cost–Volume–Profit). Persist locally · Jump to break-even
Break-even, safety, and leverage
CM must be positive for BEP to be defined. MoS below 10% is a caution flag.
Equations
- CM = P − V · CM% = CM ÷ P
- BEP units = FC ÷ CM · BEP $ = FC ÷ CM%
- MoS = (Sales − BEP$) ÷ Sales · Sales = P × Vol
- DOL = CM_total ÷ (CM_total − FC) · CM_total = CM × Vol
- Target vol = (FC + Target profit) ÷ CM · Profit = CM × Vol − FC
- 1% volume profit move = CM × (0.01 × Vol)
How this is calculated
- Contribution margin (CM) = Selling price − Variable cost per unit
- CM% = CM ÷ Selling price
- Break-even units = Fixed costs ÷ CM (undefined when CM ≤ 0)
- Break-even $ = Fixed costs ÷ CM%
- Margin of safety = (Current sales − Break-even $) ÷ Current sales
- Degree of operating leverage (DOL) = Total CM ÷ (Total CM − Fixed costs)
- Target volume = (Fixed costs + Target profit) ÷ CM
- Profit at +1% volume = Current profit + CM × 1% of volume
Illustrative single-product CVP — not financial advice.
Volume shock
−30% to +30% volume — live profit, MoS, and DOL.
What-if volume
Shock stacks on your current volume. Price, V, and FC stay fixed.
Scales current volume. Readout below updates live.
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