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Use one consistent currency. Defaults are illustrative assumptions, not typical business figures.
Formula and assumptions
Contribution per unit = price − variable cost. Break-even units = fixed costs ÷ contribution per unit, rounded up to whole units. Break-even revenue = rounded units × price.
Keep fixed costs and sales in the same period. This assumes a single product, constant price and constant variable cost per unit. It excludes taxes and financing cash flows.
Worked example — illustrative only
Illustrative assumptions: $10,000 fixed costs, $50 price and $30 variable cost give $20 contribution per unit. $10,000 ÷ $20 = 500 units; revenue at that volume is $25,000.
Frequently asked questions
What if variable cost is at least the price?
With positive fixed costs there is no achievable break-even volume when each sale contributes zero or less. Increase price or reduce costs before using a volume target.
Is break-even the same as positive cash flow?
No. Timing of receipts, inventory purchases, loan repayments and other cash movements can differ from this profit calculation.