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How it works
Unit contribution margin is price minus unit variable cost. Divide fixed costs by that margin and round up.
KEY FORMULAUnits = ceiling(fixed costs / (price − variable cost)).
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Worked example
With fixed costs of 500,000, price 10,000 and variable cost 6,000: 500,000 / 4,000 = 125 units.
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Before using this result
Single-product simplification, excluding taxes, pricing changes, losses and capacity limits.
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Informational simulation. Verify real-world conditions before making decisions.
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Frequently asked questions
What if price is below variable cost? +
There is no positive-unit break-even point under that assumption.