Work out profit per unit and how many sales cover fixed costs.
Contribution per unit is price minus variable cost, and dividing fixed costs by it gives the break-even volume. Contribution margin tells you how each sale chips away at overhead once variable costs are covered.
Contribution Margin
CM = price - variable cost; margin = CM / price; B/E units = fixed / CM
CM = price - variable cost; margin = CM / price; B/E units = fixed / CM Contribution per unit is price minus variable cost, and dividing fixed costs by it gives the break-even volume.
Contribution margin tells you how each sale chips away at overhead once variable costs are covered.
This calculator takes 3 inputs: Selling price per unit, Variable cost per unit, Total fixed costs. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.