[Verse 1]
When fixed costs stay the same no matter what you sell
Variable costs rise with every unit bell
The contribution margin tells the story clear
Revenue minus variable costs year after year
[Chorus]
Break-even point where profits start to show
Fixed costs divided by contribution ratio
CVP analysis guides the way
Costs and volume pricing every day
When sales exceed that magic line
Profits start to shine
[Verse 2]
Sarah's bakery pays two thousand rent each month
That's a fixed cost she can always count
Flour and sugar cost three dollars per cake sold
Variable costs as the story's told
[Chorus]
Break-even point where profits start to show
Fixed costs divided by contribution ratio
CVP analysis guides the way
Costs and volume pricing every day
When sales exceed that magic line
Profits start to shine
[Verse 3]
Selling price is ten dollars contribution seven
Variable costs three leaves margin heaven
Two thousand fixed divided by seven gives
The break-even units where profit lives
[Bridge]
Two hundred eighty-six cakes to break even clean
Every cake beyond that adds to the green
Degree of leverage shows the sensitivity
Small volume changes big profitability
[Chorus]
Break-even point where profits start to show
Fixed costs divided by contribution ratio
CVP analysis guides the way
Costs and volume pricing every day
When sales exceed that magic line
Profits start to shine
[Verse 4]
What if rent goes up or flour costs more
Recalculate to know what's in store
Lower prices mean more units to sell
Higher margins help profits swell
[Outro]
Fixed plus variable equals total cost
Understanding CVP means profits aren't lost
Break-even analysis shows the way
For profitable business every day