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If company can not achieve , the company suffers from loss.If the company suffers from loss, does it mean that company faces with the difficulties in paying its monthly bills for rent, salary, suppliers and labors?The contribution margin represents the amount of income or profit the company made before deducting its fixed costs.

The required sales level is 0,000 and the required number of units is 300,000.Not necessarily, the issue can be resolved by computing cash Break-even point.Form that the Fixed costs include certain non-cash expenses like depreciation and amortization of expenses, for which no cash is needed in short-run.This calculation of targeted income assumes it is being calculated for a division as it ignores income taxes.If a targeted net income (income after taxes) is being calculated, then income taxes would also be added to fixed costs along with targeted net income.

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