Break-even point
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Break-even units = fixed costs ÷ (price − variable cost per unit)
Break-even sales = break-even units × price
A candle shop pays 5,000 a month in fixed costs, sells candles for 25 and spends 10 on each one. Every candle leaves 15 towards the fixed costs, so it needs 5,000 ÷ 15 = 333.3, or 334 candles a month, about 8,350 in sales, to break even.
Units = (fixed costs + target profit) ÷ (price − variable cost)
Fixed costs stay the same however much you sell: rent, salaries, insurance, software. Variable costs grow with each sale: materials, packaging, shipping, card fees. Enter fixed costs for a period (such as a month) and variable costs per unit.
It's what each sale leaves over to pay the fixed costs: price minus variable cost per unit. Once enough sales have paid the fixed costs, each further sale's contribution margin is profit.
Then every sale loses money and you can never break even. You need to raise the price or cut the cost per unit.
Raise the price, lower the variable cost per unit, or cut fixed costs. Try each in the calculator to see which moves the break-even point the most.