Contribution per unit
Selling price minus variable cost gives the amount available to recover fixed costs.
069 · BUSINESS & FINANCE
Break-even Point Calculator
Calculate contribution margin, break-even units, and break-even revenue from fixed costs, selling price, and variable cost.
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Contribution / Unit4,000
Contribution Margin Ratio40%
Break-even Revenue7,500,000
Break-even Units
Calculated750
Practical minimum750
Formula
CM = selling − variable · BE units = fixed ÷ CM · BE revenue = fixed ÷ (CM ÷ selling)HOW TO USE
How to use
- 01
Enter total fixed costs for one consistent period.
- 02
Enter selling price and variable cost per unit.
- 03
Review contribution per unit and contribution margin ratio.
- 04
Compare calculated break-even units with the rounded-up practical minimum.
- 05
Use Target Profit or Expected Volume when needed.
- 06
Compare calculated break-even volume with your current average sales volume to judge whether the target is realistic.
BREAK-EVEN GUIDE
Break-even calculation essentials
Required units and revenue are driven by contribution per unit: selling price minus variable cost.Contribution margin ratio
Contribution divided by selling price shows the share of revenue available for fixed costs and profit.
Break-even units
Fixed costs divided by contribution per unit gives break-even sales volume.
Break-even revenue
Fixed costs divided by contribution margin ratio gives break-even revenue.
Target profit
(Fixed costs + target profit) divided by contribution gives the required units.
Expected volume
Expected units × contribution − fixed costs gives expected operating profit.
IMPORTANT NOTES
Important notes
- Contribution per unit equals selling price minus variable cost per unit.
- If selling price is less than or equal to variable cost, a normal break-even point does not exist.
- Fractional break-even units are rounded up for the practical minimum target.
- Fees from other tools are included only when you explicitly enter them as variable cost.
- Do not mix time periods. If fixed costs are monthly, use monthly sales volume and costs on the same basis.
FAQ
Frequently asked questions
01What happens at 3,000,000 fixed, 10,000 price and 6,000 variable cost?+
Contribution is 4,000, break-even is 750 units, and break-even revenue is 7,500,000.
02How many units for a target profit of 5,000,000?+
(3,000,000+5,000,000)÷4,000 = 2,000 units.
03What if price equals variable cost?+
Contribution is zero, so fixed costs cannot be recovered through unit sales.
04What if break-even is 750.2 units?+
The calculated value is 750.2 and the practical minimum is 751 units.