Understanding the calculation
Contribution margin is unit price minus variable cost. Divide fixed costs by it and round up because units are indivisible. Minimum revenue is those units times price. Profit subtracts all costs from expected sales. Safety margin compares expected sales with the threshold and can be negative. The table shows revenue and costs at different sales levels without forecasting demand.
Break-even units = ceil(fixed costs / (price − variable cost)). Profit = (price − variable cost) × sales − fixed costs.
Worked example
Fictional EUR example: fixed costs 1,000, price 25, variable cost 10. Contribution 15; theoretical threshold 66.67, so 67 units and revenue 1,675 are needed. At 100 sales, profit is 500 and safety margin 33%. Price and variable cost both 10 give no positive threshold.
Assumptions and limits
Single-product model with constant price, variable cost and fixed costs. No automatic taxes or capacity limit. Sensitivity changes one factor by ±10%. Changing period only changes the label: enter costs and sales for it. The threshold does not guarantee actual sales.
Questions about this tool
Why are units rounded up?
An indivisible unit cannot be partly sold; rounding down leaves uncovered costs.