Contribution covers your fixed costs
Unit contribution = selling price − variable cost. Break-even units = fixed costs ÷ unit contribution, rounded up to a whole unit. To target a profit, add that profit to fixed costs before dividing. The selling price must exceed variable cost.
Example
With CAD 3,000 fixed costs, a CAD 100 price and CAD 40 variable cost, each sale contributes CAD 60. Break-even is 50 units or CAD 5,000 of sales. To earn CAD 1,200 before tax requires 70 units or CAD 7,000 of sales.
Use one period and consistent tax treatment for all costs. This simple model assumes one comparable product or service, constant price and unit cost, and no capacity limits. It excludes sales tax and income tax.
Source: BDC: break-even point (French source).