Find the exact number of units you need to sell to cover all costs. Calculates break-even point in units and revenue, plus contribution margin.
Rent, salaries, insurance, etc.
Materials, shipping, etc. per unit
See profit/loss at this volume
Contribution Margin
CM = Price − Variable Cost
Amount each unit contributes to covering fixed costs and profit.
Break-Even Units
BEP = Fixed Costs ÷ CM
Units that must be sold before any profit is made.
Break-Even Revenue
BER = Fixed Costs ÷ CM Ratio
Total sales dollars needed to cover all costs.