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Logic Model 7 — Multi-Product Breakeven

C/S Ratio & Breakeven Revenue

When a business sells many products, you can't track individual units. Instead, the Contribution to Sales ratio — the weighted average of all products combined — tells you how much of every rand of revenue is available to cover fixed costs.

C/S Ratio
35%
of every R1 revenue
Fixed costs
R35 000
Breakeven revenue
R100 000
Net position
R 0
Safety margin
—
reach BEP first
Contribution to Sales ratio
C/S Ratio — weighted average (%) 35%
What this means
For every R100 of revenue, R35 contributes to fixed costs & profit, and R65 goes to variable costs.
Fixed costs & revenue
Fixed costs (R)35 000
Current revenue (R)200 000
C/S Sensitivity Analysis step size
Sensitivity step: ±5 percentage points showing ±5pp & ±10pp bands
Variable cost portion Contribution band Profit zone Fixed cost hole Safety margin BEP if C/S improves BEP if C/S worsens
Multi-product breakeven using C/S ratio. Drag sliders to explore.
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C/S Ratio Sensitivity — What If the Mix Changes?
Scenario C/S Ratio BEP Revenue Safety Margin (R) Safety Margin (%) Net Profit / Loss
C/S Ratio = Total Contribution ÷ Total Revenue Breakeven Revenue = Fixed Costs ÷ C/S Ratio Safety Margin = Current Revenue − Breakeven Revenue
Teaching note: A business with 10 000 products cannot calculate a single unit breakeven point — but it can always calculate its weighted average C/S ratio. That single number, divided into fixed costs, gives the breakeven revenue figure. This is how large retailers, hospitality groups, and service businesses manage their cost structures. The C/S ratio is also a direct measure of business model quality: a ratio above 50% signals a high-margin model; below 20% signals a volume-dependent, fragile one.