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Contribution Margin Approach to Cost-Volume-Profit Analysis

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This chart enables you to visualize the components of costs and revenue from a Contribution Margin point of view. In this view, the difference between the selling price and the variable cost of each successive unit sold is allocated to the payment of fixed costs until these costs are fully paid. Thereafter, the difference from each unit contributes to the profit.

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By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.

You will break even at 56 units.

*indicates required.

Break even analysis inputs:

Price per unit:*This entry is required.Enter an amount between $0.00 and $1,000,000.00

Variable unit cost:*This entry is required.Enter an amount between $0.00 and $100,000.00

Fixed cost:*This entry is required.Enter an amount between $0 and $1,000,000,000

Expected unit sales:*This entry is required.Enter an amount between 0 and 10,000,000

Cost and Revenue Stacked Column Graph: Please use the calculator's report to see detailed calculation results in tabular form.

Cost and Revenue

Contribution Margin Approach to Cost-Volume-Profit Analysis Definitions

Variable unit cost

Cost associated with producing an additional unit.

Fixed cost

The sum of all costs required to produce any product. This amount does not change as production increases or decreases.

Expected unit sales

The number of units that are expected to be sold.

Price per unit

Price you will be able to receive per unit.

Total variable costs

The product of units produced and variable unit cost (example 10 units at $5 variable cost produces a total variable cost of $50).

Total costs

Sum of fixed costs and variable costs.

Total revenue

Product of price and expected sale unit sales (example 10 units at $10 equals $100 total revenue).

Profit

Total revenue minus total costs.

Break-even

Number of units required to sell to make a profit of zero.