Fixed Cost =

Variable Cost =

Price =

Tax Rate = 0

Profit = 0

Quantity =

Calculates profitability. Breakeven (or break even) is the point at which expenses equal revenues.

To calculate, enter the data you know then select ? button on the row you don't.

- Fixed Cost: Fixed costs. These are costs that are not dependent on each unit sold. An example is rent -- whether 0 or 5000 units are sold, the rent will always be the same.

- Variable Cost: Variable cost per unit. These are costs that are dependent on each unit sold. For instance, shipping costs do not occur unless a unit is sold.

- Price: Price per unit. This is the price at which the product is sold.

- Tax Rate: Applicable tax rate as a percentage.

- Profit: Amount of profit determined or expected. Positive values are profits while negative ones are losses.

- Quantity: Number of units sold.

A startup company has $500,000 in operating expenses every month. It is introducing its first product, which costs $115 to produce. This product will sell to distributors for $245 per unit. Its tax rate is 40%. How many units must the company sell every month to cover its costs (break even)?

- Fixed Cost: 500,000

- Variable Cost: 115

- Price: 245

- Tax Rate: 40%

- Profit: 0

Select ? on Quantity row. The company needs to sell 3,847 units per month.

Fixed Cost

Variable Cost

Price

Tax Rate

Profit

Quantity

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break even