You have to set of your cost delta against your margin, not agaist your cost. Why do devs keep repeating this faulty reasoning? Where did this emerge?

If you cost 20K a month at a 5% average margin, the required ' break even' for a $200 cost increase is 20% not 1% increased productivity.

And it gets worse as you just assumed that increased 'productivity' 100% was converted back into extra margin, which is not obvious at all.