Break-even units vs break-even sales revenue
Break-even units divide fixed costs by contribution per unit. Break-even sales revenue divides fixed costs by the contribution-margin fraction. With fixed costs of 1,000, price 20 and variable cost 12, break-even is 125 units or 2,500 in sales.
Break-even units vs break-even sales revenue
| Unit price | Variable cost per unit | Contribution per unit | Contribution margin | Break-even units at 1,000 fixed costs | Break-even revenue |
|---|---|---|---|---|---|
| 20.00 | 12.00 | 8.00 | 40.00% | 125.00 | 2500.00 |
| 50.00 | 30.00 | 20.00 | 40.00% | 50.00 | 2500.00 |
| 100.00 | 80.00 | 20.00 | 20.00% | 50.00 | 5000.00 |
| 30.00 | 18.00 | 12.00 | 40.00% | 83.33 | 2500.00 |
Formula & method
Contribution per unit = price − variable cost
Break-even units = fixed costs ÷ contribution per unit
Break-even revenue = fixed costs ÷ ((price − variable cost) ÷ price)Keep the time period consistent: monthly fixed costs require monthly sales and costs. The result is continuous arithmetic; if products are indivisible, round units upward to find the first whole-unit volume that covers the included costs. Use that rounded quantity when calculating attainable revenue.
The model assumes a stable selling price and variable cost per unit. A business selling several products needs a justified sales mix or separate scenarios. Semi-variable expenses should be split into fixed and variable portions rather than silently counted twice.
Worked example
At price 30, variable cost 18 and fixed costs 1,000, the exact break-even is 83.333 units. The first whole-unit volume is 84 units, producing revenue of 2,520 and contribution of 1,008.
What can change the answer
There is no finite break-even volume when price is at or below variable cost and fixed costs are positive. This is a planning model, not a complete accounting or financing forecast.
Sources & definitions
Method checked:
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