RightFiguresWhole units that cover one product
Contribution per unit is the selling price minus the variable cost of that unit. The break-even count is the fixed cost divided by a positive contribution, rounded up to a whole unit. Selling a fraction of a unit is not a result. When the fixed cost divides evenly, the count does not add an extra unit.
This is not the profit margin calculator, which turns a cost and a margin into a price, or a price and a cost into a margin percent. It is not the markup calculator, which divides profit by cost. It is not an occupancy rate. The unit price calculator compares a package price with a quantity. This page counts units of one product.
The SBA startup-cost guide states the unit formula and a contribution margin of (sale price − variable cost) ÷ sale price. The SBA glossary describes break-even analysis as the approximate sales volume required to cover costs. This page uses that unit formula and that margin ratio. It does not add a cushion for expenses you did not type, and it does not ask for projected sales.
$10,000 of fixed cost
A $10,000.00 fixed cost, a $50.00 selling price, and a $30.00 variable cost give a $20.00 contribution. The count is 500 units. The margin is 40%. Revenue is $25,000.00. The fixed cost is covered exactly.
A $100.00 fixed cost, a $10.00 price, and a $3.00 variable cost need 15 units. Those units contribute $105.00. The last unit is only partly needed. A $0.01 fixed cost, a $0.03 price, and a $0.01 variable cost need 1 unit, and the margin is 66.666667%.
Zero fixed cost and no coverage
A $0.00 fixed cost and a positive contribution is 0 units. Selling nothing already covers a zero fixed cost. A $0.00 fixed cost and a $2.00 loss per unit is still 0 units, and the result names that loss. A $0.00 fixed cost and a $0.00 contribution is 0 units.
A $500.00 fixed cost with a $0.00 or negative contribution has no unit count and no revenue. A $0.00 selling price does not show a margin, because the ratio divides by the price. Revenue above $100,000,000,000.00 is not shown. The unit count is still shown.
Frequently asked questions
Does this page set a selling price?
No. You enter the price. The result is a unit count, not a recommended price
or a markup.
Why is there no 10% cushion?
The fixed cost is the amount you enter. This page does not inflate it for
expenses you did not type.
Are the amounts sent to analytics?
No. Analytics may record that this calculator ran. The costs, the price, the
unit count, and the margin stay in this browser.
Sources & review
- Calculate your startup costs — U.S. Small Business Administration
- Glossary of Business Financial Terms — U.S. Small Business Administration
Last reviewed: . The formula is reproduced above so you can check the math independently.
Educational estimate only. This page does not set a price or decide whether a lender should rely on the sales.