How this calculator works
Each unit sold contributes its price less its variable cost towards fixed costs. Divide fixed costs by that contribution to find the theoretical quantity, then round the quantity up to whole units before calculating revenue. This model assumes one product, constant prices and costs, and that every unit is sold. It excludes tax, capacity limits and financing costs.
Formula
Contribution per unit = p - v; break-even units = F/(p-v); whole units = ceiling(F/(p-v)); revenue at whole units = p × whole units. F is fixed costs, p unit price and v variable cost. A positive contribution is required even when fixed costs are $0.
Worked example
With $1,000 fixed costs, a $25 selling price and $10 variable cost, contribution is $15 per unit. The theoretical break-even volume is 66.666667 units. Selling 67 whole units generates $1,675 and covers the fixed costs.
Advertisement
Frequently asked questions
Why round units up?
A fractional unit is useful for analysis, but selling only 66 units in the example would leave some fixed costs uncovered. The whole-unit result is the minimum integer quantity.
What if variable cost equals the price?
There is no positive contribution to cover fixed costs. The tool rejects that case and any variable cost above the price, including when fixed costs are $0.
Does the revenue at break-even include sales tax?
No. It is the selling price times the whole units, before any sales tax or other charges.