break-even calculator.
fixed costs ÷ (price − variable cost)
- break-even units / month
- 258
- break-even revenue / month
- $12,645.16
- contribution margin / unit
- $31
- contribution margin %
- 63.27%
> worked example
Fixed costs are $8,000/month, rent, software, salaries. Each unit sells for $49.00 with a variable cost of $18.00, giving a contribution margin of $31.00 per unit (63.27%). To cover the fixed base the store must sell 258 units, generating $12,653 in revenue. Every unit above 258 drops $31.00 straight to operating profit.
takeaway, Contribution margin per unit is the lever. Raising price by $5 drops break-even from 258 units to 216, a bigger operational cushion than cutting $5 from variable cost.
> when operators reach for this
- Shopify founders launching a new product and needing to know the minimum monthly order volume before the SKU earns its shelf space.
- CFOs building a budget model and stress-testing what happens to break-even when a key supplier raises variable costs by 10%.
- Subscription box operators with high fixed fulfilment costs who need to know the subscriber floor before the box becomes self-funding.
- Wholesale brands calculating whether a new retail channel can generate enough volume to justify the dedicated sales rep fixed cost.
- DTC operators evaluating a price reduction, plugging in the new price to see how many extra units are needed to keep break-even flat.
> the calculation
- contribution margin / unit
price per unit − variable cost per unit - contribution margin %
contribution margin ÷ price per unit × 100 - break-even units
fixed costs ÷ contribution margin per unitThe exact unit volume at which total revenue equals total costs. Any unit above this is pure operating profit. - break-even revenue
break-even units × price per unit