Calculating break-even in units hinges on how much each unit “contributes” toward fixed costs after covering variable costs. This contribution per unit is the selling price minus the variable cost per unit. To find how many units are needed to cover fixed costs, you divide the total fixed costs by the contribution margin per unit. In formula terms, break-even units = fixed costs ÷ (selling price per unit − variable cost per unit). If the contribution margin per unit is zero, you can never break even with positive fixed costs. The other approaches miss this idea. Multiplying fixed costs by the contribution margin per unit would not reflect how many units you must sell; it would overstate the requirement. Using the sales price per unit ignores the variable costs that reduce the amount each unit adds toward fixed costs. Adding total variable costs to fixed costs in the numerator isn’t the right way to form the amount each unit must cover; the correct calculation already accounts for variable costs through the contribution margin.

When you file an annual tax return, the form you use depends on where your income comes from. If your income is earned purely from a business or professional practice, you use Form 1701A. This form is designed for self-employed individuals and professionals, and it focuses on net income after allowable business or professional deductions, with the tax computation laid out for that income type. In contrast, Form 1700 is for those with income mainly from employment (compensation) and has withholding already done by an employer. Form 2316 is the certificate of tax withheld on compensation. Form 1701 is used when there’s mixed income—such as income from salary plus business or professional income. The choice of form aligns with the source of your income, so using Form 1701A is the best fit when you earn only from business or professional activities.

A debit memo is the bank entry that lists charges deducted from the depositor’s account. It’s the bank’s notice that funds have been debited, reducing the balance—often including items like bank service charges, ATM fees, or checks returned. In bank reconciliation, this document explains why the bank’s reported balance decreases, and it contrasts with a credit memo, which increases the balance. NSF indicates non-sufficient funds for a particular item, which is a specific debit cause, but not the general term for the entry itself.

The debt-to-equity ratio tells you how much debt a company relies on relative to its shareholders’ equity. It is calculated by dividing total liabilities by total equity. This shows leverage—how much funding comes from creditors versus owners. A higher ratio means more debt per unit of equity, signaling greater financial risk if earnings drop, while a lower ratio indicates more equity funding and potentially less risk. The other formulas don’t capture leverage properly: using current liabilities over current assets measures short-term liquidity, not overall leverage; equity over liabilities is the inverse of the debt-to-equity ratio; and net income over equity reflects profitability, not how much debt is used relative to equity.