CalculateY
Quick Answer
A business with $10,000 in fixed costs, a $50 selling price, and $30 variable cost per unit needs to sell 500 units to break even, generating $25,000 in revenue.
Common Examples
| Input | Result |
|---|---|
| $10,000 fixed, $50 price, $30 variable | 500 units / $25,000 revenue |
| $5,000 fixed, $25 price, $10 variable | 334 units / $8,350 revenue |
| $20,000 fixed, $100 price, $40 variable | 334 units / $33,400 revenue |
| $50,000 fixed, $200 price, $120 variable | 625 units / $125,000 revenue |
How It Works
This calculator uses the break-even formula:
Break-Even Units = Fixed Costs / (Price per Unit − Variable Cost per Unit)
Where:
- Fixed Costs = costs that don’t change with volume (rent, salaries, etc.)
- Price per Unit = selling price of one unit
- Variable Cost per Unit = cost to produce/acquire one unit
- Contribution Margin = price per unit − variable cost per unit
The contribution margin ratio is the contribution margin as a percentage of the selling price. It represents how much of each dollar of revenue goes toward covering fixed costs.
Worked Example
A small business has $10,000 per month in fixed costs (rent, salaries, insurance). Each product sells for $50 with $30 in variable costs per unit. Contribution margin = $50 - $30 = $20. Break-even units = $10,000 / $20 = 500 units. Break-even revenue = 500 × $50 = $25,000. Selling 501 units generates the first dollar of profit.