Break-even sales units
Divide fixed costs by contribution per unit and round up to a whole unit.
How this works
Contribution per unit = selling price per unit − variable cost per unit. Break-even units = fixed costs ÷ contribution per unit, rounded up to a whole unit. The selling price must exceed variable cost; the implementation uses a small numerical tolerance near whole-unit boundaries.
Example
The illustration may use different inputs from the reproducible default inputs listed below.
The default contribution is $50 − $30 = $20 per unit. Dividing $10,000 of fixed costs by $20 gives 500 units. With all reset-default inputs, whole units to break even: 500.
- Fixed costs ($)
- 10000
- Price per unit ($)
- 50
- Variable cost per unit ($)
- 30
- Whole units to break even
- 500
Scope and assumptions
Assumes constant price, constant unit variable cost and one product or a consistent unit mix. The fixed costs and expected sales must refer to the same period. Capacity constraints, sales uncertainty, tiered costs and taxes not entered in costs are not modeled.
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