What this calculator helps you do
Calculate units and revenue needed to cover fixed costs, then estimate the volume required for a target profit. The calculation runs entirely in your browser; SENNA Finance does not receive the values entered into this tool.
Worked example
Using the default example—fixed costs of $50,000, selling price per unit of $75, variable cost per unit of $42, target profit of $25,000—the calculator returns break-even units of 1,516; break-even revenue: $113,700.00; contribution margin per unit: $33.00. Change the assumptions to match your own case rather than relying on the example.
Formula and calculation basis
Inputs are converted to the periodic units required by the formula. Results are calculated with full JavaScript numeric precision and rounded only for display.
How to interpret the result
The contribution margin must be positive. Use realistic cost behavior and test whether fixed costs change at higher production levels.
Common mistakes to avoid
- Treating semi-variable costs as fully fixed or fully variable without analysis.
- Using average selling price that ignores discounts or product mix.
- Assuming all produced units will be sold.
Limits and assumptions
This is a single-product or single-average-unit model. Multi-product mix, stepped fixed costs, tax, and capacity limits are not modeled.
Outputs are estimates, not contractual quotations, regulated disclosures, tax advice, investment advice, or a substitute for professional review.
Frequently asked questions
What is contribution margin?
Selling price per unit minus variable cost per unit.
Why must price exceed variable cost?
Otherwise each additional unit does not contribute toward fixed costs.
Can I set a target profit?
Yes. The calculator adds the target profit to fixed costs before dividing by contribution margin.
Sources and reference context
External references provide educational context and do not imply endorsement of SENNA Finance.