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How much of the contribution margin is profit on units sold in excess of the break-even point?

Author:
Harold Averkamp, CPA, MBA

After the break-even point is reached, the entire contribution margin on the next units sold will be profit…provided the total fixed costs and expenses do not increase.

The reason lies in the definition of contribution margin: selling price minus the variable costs and expenses. Once the contribution margins have covered the total amount of fixed costs and expenses, the entire contribution margin on the next units will go to profit.

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

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