METHOD & GUIDANCE
How this calculation works
Enter figures from the same period and on a consistent sales tax-inclusive or sales tax-exclusive basis. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Use contribution per unit to connect pricing with break-even volume and expected profit at the forecast sales level.
Worked example
An 80 price less 32 variable cost contributes 48 per unit. At 120 sales that contribution is compared with 4,000 fixed cost.
Common mistakes
- Including fixed overhead in variable cost.
- Assuming every product has the same contribution.
- Focusing on revenue while contribution is negative.
Frequently asked questions
Is this calculator free?
Yes. It requires no account and stores no calculation inputs.
Can I use the answer for a formal filing?
No. It is a planning estimate, not accounting, tax, legal or investment advice. Confirm material decisions with a qualified professional.
Should I include sales tax?
Use a consistent basis throughout. Businesses that recover input tax commonly model net figures; consumer-facing prices are often considered gross.
Continue the decision
- Break-even Calculator — Find the sales volume needed to cover every cost.
- Target Pricing Calculator — Find the price needed to achieve a target margin.
Method reviewed 26 July 2026. Figures are illustrative and calculated locally in your browser.