In short
This contribution margin calculator shows what each sale has left after its variable costs. That amount is the contribution margin per unit. The calculator then adds up the contribution for the units you expect to sell and subtracts your fixed costs. Last, it gives the smallest whole number of units that covers those fixed costs.
Use it for one product or service at one price over one period, such as a month. Enter the price, the variable cost per unit, the fixed costs and the units sold. The result updates as you type.
- Break-even75 units$900.00 of fixed costs ÷ $12.00 per unit
- Contribution$12.00 per unit40% of the $30.00 price
- Revenue at break-even$2,250.0075 units × $30.00
- Result at 100 units$300.00after variable and fixed costs
Inputs
How to use it
Before you start
Variable, fixed or mixed?
Where a cost goes decides the answer. A variable cost rises with each unit sold. A fixed cost stays the same within the range of sales you expect. A mixed cost has both a fixed base and a variable part.
| Cost | Usually | Why | Where to enter it |
|---|---|---|---|
| Product or materials | Variable | You use more of it with every unit you make or buy. | Variable cost per unit |
| Packaging and postage you pay | Variable | You pay for them again with every order. | Variable cost per unit |
| Payment and marketplace fees | Variable | They are charged on each sale, so use an average per unit. | Variable cost per unit |
| Rent and insurance | Fixed | The bill is the same whether you sell 10 units or 1,000. | Fixed costs |
| Salaries and flat-fee software | Fixed | You pay them for the period, whatever you sell. | Fixed costs |
| Advertising | Either | A set monthly budget is fixed. A share of each sale is variable. Use only one. | The field that matches how you pay |
| Phone, electricity and fuel | Mixed | A base charge plus a part that grows with use. | Split it: base to fixed, the rest per unit |
These are typical cases, not rules. Rent, insurance and salaries are fixed in the SBA and OpenStax examples. Direct materials are variable in OpenStax. The SBA lists telephone, repairs and fuel as mixed. Your own cost can behave differently.
The math
How it is calculated
Variable costs change with each unit sold. Fixed costs do not change within the range of sales you expect. Break-even is the volume where total contribution equals fixed costs, so the result is zero. It exists only when each unit contributes more than $0. Money is worked out in whole cents.
What you charge for one unit, minus what that unit costs to make and sell.
Divide that per-unit amount by the price and multiply by 100. It is the share of each sale that goes toward fixed costs and profit.
Multiply the price by the units you sold.
Multiply the per-unit contribution by the units you sold.
Subtract your fixed costs from the total contribution. Positive is profit, negative is a loss.
Divide your fixed costs by the contribution per unit, then round up to the next whole unit.
Multiply the break-even units by the selling price.
Excel and Google Sheets
A contribution margin calculator in a spreadsheet
The same contribution margin formula works in Excel and Google Sheets. Put headings in row 1 and the numbers in row 2.
| Cell | What it holds | Enter |
|---|---|---|
| A2 | Selling price per unit | 30 |
| B2 | Variable cost per unit | 18 |
| C2 | Fixed costs for the period | 900 |
| D2 | Units sold | 100 |
| E2 | Contribution per unit | =A2-B2 |
| F2 | Contribution margin (format as %) | =E2/A2 |
| G2 | Result after fixed costs | =E2*D2-C2 |
| H2 | Break-even units, rounded up | =IF(E2>0, |
| I2 | Revenue at break-even | =IF(ISNUMBER(H2), |
Example
Worked example
Take an example product that sells for $30.00 and costs $18.00 per unit to make and ship. It has $900.00 of fixed costs in a month, and you sell 100 units. These are the calculator's starting numbers.
The first 75 units only pay for the $900.00. Each of the other 25 units adds $12.00 to the result, which is where $300.00 comes from.
Picture it
Where the money and the units go
100 units at $30.00. The $1,200.00 left after variable costs is the total contribution.
Picture it
The break-even chart
Units sold · Dollars
Above break-even, the gap between the lines is the result.
Scenarios
What if the price or the fixed costs change?
Both tables change one input and keep the rest of the starting example ($18.00 variable cost, 100 units). A higher price makes each unit contribute more, so fewer units are needed; higher fixed costs need more.
| Selling price | Contribution per unit | Margin | Break-even units | Revenue at break-even | Result at 100 units |
|---|---|---|---|---|---|
| $26.00 | $8.00 | 30.77% | 113 | $2,938.00 | -$100.00 |
| $28.00 | $10.00 | 35.71% | 90 | $2,520.00 | $100.00 |
| $30.00 | $12.00 | 40% | 75 | $2,250.00 | $300.00 |
| $32.00 | $14.00 | 43.75% | 65 | $2,080.00 | $500.00 |
| $34.00 | $16.00 | 47.06% | 57 | $1,938.00 | $700.00 |
The highlighted row is the starting example.
Selling price · Break-even units
The curve is smooth; the calculator rounds up to whole units.
| Fixed costs | Break-even units | Revenue at break-even | Result at 100 units |
|---|---|---|---|
| $600.00 | 50 | $1,500.00 | $600.00 |
| $900.00 | 75 | $2,250.00 | $300.00 |
| $990.00 (starting amount plus 10%) | 83 | $2,490.00 | $210.00 |
| $1,200.00 | 100 | $3,000.00 | $0.00 |
| $1,500.00 | 125 | $3,750.00 | -$300.00 |
The SBA suggests adding about 10% to a break-even analysis for expenses you cannot predict. The row marked plus 10% shows what that does here.
Interpret
Reading your result
Contribution is not yet profit
Total contribution is what sales leave after variable costs. Fixed costs come out of it next. At 60 units the starting example contributes $720.00, but the result is -$180.00 because that is less than the $900.00 of fixed costs.
Break-even is a minimum, not a forecast
It is the lowest volume that covers the costs you entered. The calculator does not know whether you can sell that many. The SBA describes break-even analysis as an estimate for planning, not an exact accounting or financing figure.
Break-even is always a whole number of units
You cannot sell part of a unit, so the calculator rounds up. With $905.00 of fixed costs, 905 ÷ 12 is 75.42. It shows 76 units, because 75 units still leave a result of -$5.00.
Zero or negative contribution has no break-even
If a unit contributes $0 or less, no number of sales can cover positive fixed costs. The calculator says so instead of showing a number. The cards below show each case.
Interpret
When there is no break-even
Break-even exists only when each unit contributes something. The calculator names each other case instead of showing a number. Each card changes the costs of the $30.00 example.
Zero contribution, fixed costs to cover
Variable cost $30.00, fixed costs $900.00. The break-even line shows: Not attainable with positive fixed costs and nonpositive contribution.
Negative contribution, fixed costs to cover
Variable cost $33.00, fixed costs $900.00. The break-even line shows: Not attainable with positive fixed costs and nonpositive contribution.
Zero contribution, no fixed costs
Variable cost $30.00, fixed costs $0.00. The break-even line shows: Every supported volume breaks even (zero contribution and fixed costs).
Negative contribution, no fixed costs
Variable cost $33.00, fixed costs $0.00. The break-even line shows: Only zero sales; each additional sale creates a loss.
Positive contribution, no fixed costs
Variable cost $18.00, fixed costs $0.00. The break-even line shows: 0 units.
A threshold above the supported range
Variable cost $29.99, fixed costs $20,000.00. The break-even line shows: Outside the supported 1,000,000-unit or $1 billion revenue range. A unit contributes $0.01, so covering the fixed costs would take more than the supported 1,000,000 units.
- More volume does not fix a loss on every unitTake a negative contribution with $900.00 of fixed costs. Then 100 units give -$1,200.00, and 200 units give -$1,500.00.
- The only levers are price and variable costContribution is the price minus the variable cost. Raise the price or cut the variable cost until it is above zero, then the fixed costs can be covered.
Targets
What is a good contribution margin?
No percentage is good for every business. It is good when it covers your fixed costs at the volume you can realistically reach. Work backward from that volume.
| Units you expect | Contribution needed per unit | Price needed at $18.00 variable cost | Margin at that price | Result at that price |
|---|---|---|---|---|
| 50 | $18.00 | $36.00 | 50% | $0.00 |
| 75 | $12.00 | $30.00 | 40% | $0.00 |
| 100 | $9.00 | $27.00 | 33.33% | $0.00 |
| 150 | $6.00 | $24.00 | 25% | $0.00 |
Fixed costs of $900.00. Every result is the calculator's own output, so a price that only just breaks even shows $0.00.
Compare your margin with your own earlier periods and between your products before you compare it with anyone else. Published averages count different costs, so this page quotes none.
Avoid
Common mistakes
Counting a cost twice
Say you spread the $900.00 over 100 units as $9.00 each. You add it to the variable cost and also enter it as fixed costs. This cuts the contribution to $3.00 and lifts break-even from 75 to 300 units.
Wrong$27.00 variable cost and $900.00 fixed:300 unitsRight$18.00 variable cost and $900.00 fixed:75 unitsMixing periods
Fixed costs and units must cover the same period. Monthly fixed costs of $900.00 against a year of 1,200 units gives a result of $13,500.00. With twelve months of fixed costs it is $3,600.00.
Wrong$900.00 for a month against a year of units:$13,500.00Right$10,800.00 for the year:$3,600.00Blending several products into one
One average price and one average cost hide which product pays for what. The SBA bases its analysis on a single product or service. It says you can also run the numbers for each one separately. OpenStax assumes the sales mix stays constant. This calculator has no mix input, so run each product on its own.
Limits
What it does not include
- It models one product or service at one constant price. Fixed costs are assumed to stay the same at the units you enter, which OpenStax calls the relevant range.
- No platform fees, taxes, refunds or financing costs are added. Only the costs you enter are used, and a cost you leave out is not subtracted.
- Price must be above $0. Variable and fixed costs can be $0. All amounts allow up to two decimal places, and revenue, variable costs and the result must each stay within $1 billion.
- Units sold must be a whole number from 0 to 1,000,000. A break-even point above 1,000,000 units or $1 billion of revenue is labeled outside the supported range.
- It does not take a profit goal and does not work out a margin of safety or a sales mix.
- Percentages show up to two decimals. It is a calculation, not accounting, tax or financial advice, and nothing you enter is saved or sent anywhere.
Questions
Questions
Is contribution margin the same as profit margin or gross margin?
No, they subtract different costs. Contribution margin subtracts only variable costs. Gross margin subtracts the cost of goods sold, and the profit margin calculator subtracts every cost you include. In the starting example the contribution margin is 40%, while the $300.00 left after fixed costs is 10% of the $3,000.00 of revenue. Open the Profit Margin Calculator
How many units do I need to reach a profit goal?
Add the profit you want to the fixed costs, divide by the contribution per unit and round up. For a $600.00 goal, ($900.00 + $600.00) ÷ $12.00 is 125 units. The calculator has no profit-goal field, but entering 125 as units sold shows a projected result of $600.00.
Why is break-even revenue not fixed costs divided by the contribution margin ratio?
That shortcut gives revenue as if you could sell part of a unit. With $905.00 of fixed costs it gives $2,262.50. The calculator multiplies the 76 whole units by the price instead and shows $2,280.00, the revenue you would really take in.
Can I use it for a service or for hours?
Yes. A unit is whatever one price buys, such as a booking or an hour of work. Enter the price and the variable cost for that same unit, and the fixed costs and units for one period.
Sources
Sources and review
Sources5 official pages, each read on the date shownShow allHide
- OpenStax Managerial Accounting 3.1: contribution margin per unit, ratio and totalopenstax.org · Read
Contribution margin as price minus variable cost per unit, its ratio to price, total contribution, and fixed costs as costs that do not change within a given range. It does not compare contribution margin with gross margin.
- OpenStax Managerial Accounting 3.2: break-even in units and dollarsopenstax.org · Read
Break-even units as fixed costs divided by contribution per unit, the profit-goal version of that formula, and the assumptions of constant price and sales mix. It does not say how to round part units: rounding up is this calculator's rule for whole sales.
- SBA: break-even pointlegacy.sba.gov · Read
Fixed and semi-variable (mixed) costs with examples, the single-product basis, the suggestion to add about 10% for unpredictable expenses, and the caution that the result is an estimate.
- OpenStax Financial Accounting 6.6: multi-step income statementsopenstax.org · Read
Gross margin as net sales minus cost of goods sold. It does not mention variable costs or contribution margin.
- OpenStax Managerial Accounting 3.5: margin of safetyopenstax.org · Read
Margin of safety as the difference between current sales and break-even sales, and in dollars as budgeted or actual sales minus break-even sales. The calculator does not work it out; the break-even sales guide uses it.
The page text was last updated on October 14, 2026 and the sources were last checked on October 7, 2026. Example figures are illustrative and were made with the same formulas as the calculator.
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