- What is the break-even price formula?
- Break-even Price per unit = (Fixed Costs / Units to Sell) + Variable Cost per unit. This is the minimum price at which total revenue equals total cost. Selling above this price generates profit; selling below it generates a loss.
- How does sales volume affect the break-even price?
- Higher expected sales volume lowers the break-even price because fixed costs are spread across more units. Selling 1,000 units instead of 500 at the same fixed costs cuts the fixed cost per unit in half. This is the core logic behind economies of scale.
- What is the difference between break-even price and break-even units?
- Break-even price answers: 'Given how many units I plan to sell, what is the minimum price I can charge?' Break-even units answers: 'Given my selling price, how many units must I sell to cover costs?' Both are useful depending on whether price or volume is the variable you are solving for.
- What should I do with the break-even price?
- The break-even price is a floor, not a target. Add your desired profit margin on top to set a target selling price. The profit scenario table in this calculator shows how profit scales at different price points above break-even, helping you evaluate pricing strategy.
