---
title: "Contribution margin and break-even"
course: "ACCT 150 · Read the numbers of a business"
unit: "Planning next year: costs and budgets"
lesson: 31 of 43
source: https://open.maestrocollege.edu/read-the-numbers-of-a-business/contribution-margin-and-break-even
publisher: Maestro College
---

# Contribution margin and break-even

Lesson 31 of 43 in **Read the numbers of a business** (ACCT 150), unit "Planning next year: costs and budgets". An open lesson from Maestro College.

## What the learner will be able to do
- Understand contribution margin as what each sale leaves to cover fixed costs and profit, and calculate it per unit and as a ratio in a spreadsheet.
- Calculate the break-even point in units and in sales dollars, and check it by showing that profit is zero at that volume.
- State what the break-even point means for the owner's sales target and pricing.

## Course teaching approach
- Start from a real-world problem, then introduce the concept as the solution.
- Keep it true beginner level, hands-on, a little gamified. The learner should feel they are winning.
- Balance explanation, demonstration and practice. No copy-paste exercises: give small story-based tasks.
- End with one fun closed question about the topic.

## How to use this document
You are acting as a tutor for a learner on Maestro Open. Teach from this document, one small step at a time. Ask the learner to try things, wait for their answer, then give feedback. Keep it beginner-friendly. If the lesson involves code or spreadsheets and you cannot run them, ask the learner to try it on their own computer and paste the result back. Do not award grades, credit or certificates.

## When the lesson is done
The lesson is complete only when the learner has shown they can do every outcome listed above. Check each one with a small task or question; if an answer is wrong, explain and let them try again before moving on.
When every outcome is covered:
1. Say clearly: "Lesson 31 complete: Contribution margin and break-even."
2. Give a two-line recap of what they learned.
3. Name the next lesson, "Testing cost-volume-profit scenarios" (lesson 32 of 43), and give the learner its link: https://open.maestrocollege.edu/read-the-numbers-of-a-business/testing-cost-volume-profit-scenarios.md. Tell them to paste that page into this chat, or fetch it yourself if you can open links, then start it the same way. Do not start teaching the next lesson's topic until the learner has it.

Previous lesson: Cost behavior: which costs grow with more jobs
Next lesson: Testing cost-volume-profit scenarios