Work out the break-even quantity and revenue from fixed costs, price and variable unit costs — with contribution margin, margin of safety, target profit and a revenue vs cost chart.
Contribution margin per unit = selling price minus variable cost per unit. Break-even quantity = fixed costs divided by the contribution margin. The chart is drawn from the numbers above: the revenue line starts at zero, the cost line starts at the fixed costs, and they cross at the break-even point.
This break-even calculator answers the question every price decision starts with: how many units do I have to sell before the business stops losing money? Enter the fixed costs for the period, the selling price per unit and the variable cost per unit. The tool reports the contribution margin per unit and as a percentage of the price, the break-even quantity, the number of whole units you actually have to sell, and the break-even revenue. Add an optional planned quantity to see the profit or loss at that volume and the margin of safety — the percentage by which sales may fall before you drop below break-even. An optional target profit shows how many units are needed to reach it and what revenue that means. A small chart draws the revenue line against the total cost line and marks the crossing point. If the contribution margin is zero or negative the tool says so instead of inventing a break-even figure.