How many units do I need to sell to break even?
Break-even units equal fixed costs divided by contribution margin per unit. If you sell for $50, variable cost is $30 and fixed costs are $5,000, break-even is 250 units.
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- Contribution per unit = selling price − variable cost.
- Break-even occurs when total contribution covers fixed costs.
- A target profit can be added to fixed costs for planning.
- Changing price or variable cost can materially move required volume.
Contribution margin drives break-even
Each unit contributes the selling price minus variable cost toward fixed costs and then profit. With $20 contribution per unit, $5,000 of fixed cost requires 250 units to cover.
The sensitivity panel lets you test how a higher price or lower variable cost changes the required volume.
Keep cost definitions consistent
A cost that changes with each unit belongs in variable cost, while a cost that stays fixed over the planning period belongs in fixed cost. Mixing the two can distort the result.
Quick questions.
What happens after break-even?
Additional contribution above fixed costs becomes operating profit before any costs not included in the model.
Can I calculate units for a target profit?
Yes. Enter the target profit and the calculator adds it to the amount that contribution must cover.
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