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Cost Volume Profit Analysis
3.2 Contribution breakeven chart
On a conventional breakeven chart it is not possible to read contribution directly from
the chart.
A contribution breakeven chart shows the variable cost line instead of
the fixed cost line. The same lines for total cost and sales revenue are
shown so the breakeven point and profit can be read off in the same
way as with a conventional chart. It is also possible also to read the
contribution for any level of activity.
$000
80
Contribution
70
Profit
Fixed
60
costs
Breakeven point
50
40
30
Loss
20
10
Margin of safety
Number of units
0
200 400 600 800 1,000 1,200 1,400 1,600
65
