Method and assumptions
Break-even volume depends on contribution after variable costs, not selling price alone. Separate fixed period costs from costs incurred on every unit.
Contribution per unit = price × (1 - variable fee rate) - variable unit cost. Break-even units = fixed costs / contribution.
Worked scenario
Enter selling price, unit variable cost, percentage selling fees, period fixed costs and a profit target. Compare the required units with production and channel capacity. Then test a lower price or higher return allowance to see whether the break-even volume remains operationally plausible.
How to interpret the result
Break-even volume uses contribution per unit, not gross margin based on purchase cost alone. Fixed costs should remain stable within the modeled range; if reaching the target requires another employee, warehouse or software tier, add that step cost and recalculate.
Input reference
- Currency
- Example default: USD
- Fixed period costs
- Example default: 10000
- Selling price per unit
- Example default: 50
- Variable cost per unit
- Example default: 25
- Variable fee rate
- Example default: 5%
- Target period profit
- Example default: 5000
Common mistakes
- Classifying order-variable cost as fixed overhead.
- Ignoring capacity and step costs at the required volume.
- Rounding down when only whole units can be sold.
Before using the result
- Use contribution after all unit-variable charges.
- Compare required units with realistic demand and capacity.
- Recalculate at each proposed price point.
Questions to check before deciding
What belongs in fixed costs?
Examples include rent, fixed software subscriptions and salaries that do not change with each unit sold.
What if contribution per unit is negative?
No positive sales volume can cover fixed costs until price, fees or variable cost changes.
Independent calculator. Not affiliated with or endorsed by the platforms mentioned.