Find how many units you must sell to cover your costs.
Rent, salaries, tooling
Materials, shipping
Units to break even
5,000
$125,000.00 in revenue
Formula
50000 ÷ 10 contribution per unit = 5,000 units
What this assumes
A product launch
Fixed costs against unit margin
50000Small operation
Lower fixed costs
12000Thin margin
Where volume has to be high
25Rent, salaries, tooling — everything you pay regardless of how much you sell.
The variable cost per unit and the price you sell it for.
In units and in revenue, plus the profit at any volume you want to test.
Break-even is fixed costs divided by contribution margin. Seeing that middle figure makes the result understandable rather than magic.
If each sale loses money, no volume ever breaks even. The tool names that problem instead of dividing by a negative number.
Break-even is the floor. Entering a profit goal shows the volume that actually achieves it.
Enter your fixed costs, the variable cost of each unit and your selling price to find the break-even point in both units and revenue. The contribution margin — what each sale contributes towards fixed costs after its own costs are covered — is shown, since that is the number that actually drives the answer. If the price does not exceed the variable cost, there is no break-even point at all, and the tool says so plainly rather than returning a meaningless figure.
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