Use this calculator to determine the optimal selling price for your product. Account for fixed overhead, variable production costs, and your desired profit goals.
Required Selling Price per Unit:
$10
Total Costs (Fixed + Variable):
$1000
Total Revenue Needed for Target Profit:
The break-even price is the point where total revenue equals total costs. At this price, your business neither makes a profit nor incurs a loss, covering all production and overhead expenses.
Formula: Price = (Fixed Costs + Target Profit + (Variable Cost × Units)) / Units
For this example, let's consider a production scenario with fixed costs of $5,000, variable costs of $10 per unit, and a target volume of 500 units.
This calculation helps business owners and managers determine the absolute floor for pricing to ensure all operational costs are covered.
What happens if I sell fewer units?You will need to increase the price or reduce costs to avoid a loss.
What are variable costs?Costs that change in proportion to production volume, like raw materials.
Is target profit necessary?No, set it to zero to find the absolute minimum price to avoid losing money.
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