The formulas
- Weighted CM = sum of mix share x (price - variable cost)
- Break-even units = fixed costs / weighted CM
- Units per product = break-even units x mix share
- Break-even sales = break-even units x weighted price
How it works
A business that sells several products has no single break-even point. It has one break-even point for each sales mix. Treat the mix as a bundle: the weighted contribution margin is what one average unit adds toward fixed costs, and fixed costs divided by that figure gives total units.
Shift the mix toward high-margin products and break-even falls, even if total units stay flat. The mix shares here are shares of units sold, not of dollars. Leave product C blank to model two products.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
Can I enter a mix by revenue?
Convert it to units first: divide each product revenue share by its price, then rescale to 100.
What counts as variable cost?
Costs that rise with each unit sold: materials, direct labor paid per unit, commissions and card fees.
Why did break-even move when only the mix changed?
The weighted margin changed. A richer mix covers fixed costs with fewer units.
Formulas on this page are the standard definitions.
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